Is Apple smiling at Michael Dell ?

Michael Dell has never been one to hold back his view on Apple, most famously quoted at a Gartner Symposium  ’97 (yes he was at it then) when asked what advice he had for Steve Jobs – ‘What would I do? I’d shut it down and give the money back to the shareholders’. As we know, the diatribe has continued for a further eight years.

Well, how things have changed.

Dell has just announced a profits warning, restating estimates to be as low as 21-23 cents instead of the 32 cents that analysts were expecting. The bad news sent Dell stock tumbling by more than 10% on the market.

Dell is struggling in the PC market because it has basically squeezed every element of the process in a commodity marketplace. Ironically Dell’s highly efficient internal processes and just in time expertise have left it with little margin for error. At the same time, HP and Lenovo have been fiercely cutting prices and squeezing margins, which have pushed Dell to compete on the ONLY thing it can compete on – prices.

A few years ago a somewhat smug Mr Dell told press that Apple was pricing itself out of the market with its premium products. It seems that Mr Dell – to use a favourite dot com expression – just doen’t get it.

The PC market has moved way beyond the commodities space, with consumers and business alike demanding one thing from the PC, one thing that Apple can deliver and Dell just can’t – INNOVATION.

So Mr Dell, let’s reflect in Apple’s announcement two days ago – quarterly profits grew by 48%, shares have risen 10% in the last two days. At the same time Apple is seeing rapidly rising revenue contributions from its expanding empire of retail stores.

In short Mr Dell there are, ironically, a number of lessons you could now learn from Apple.

Perhaps, its time you popped over to Palo Alto and listened to Mr Jobs.