Speaking of Big Cap Tech Disasters: Dell

This morning, Dell preannounced ahead of their August 17th earnings.  2Q revenue will be ~$14 billion, with earnings 21 – 23 cents. The revenue is a little shy of estimates of $14.23 billion;

The real disaster was the earnings shortfall: 21 – 23 cents is way below analyst consensus of 32
cents. The stock was off as much as 15% this morning, breaking $20, trading as low as $19.05 (its 19.22 as I type this).

While I have been a critic of Dell of some time now, let me give them a little credit. Their new "Purely You / Build to order" commercial is probably the best marketing thing they have done in a while — much better than the idiotic Dell Dude.

If Dell wants to play in the consumer space, they must understand that people do not have an IT department at home. A friend once called Windows 95 the IT Department Full  Employment Act; Dells were purchased cheaply by corporate CIO’s with a full staff to handle the inevitable issues. SOHO owners don’t have that luxury.

Purely_you_1I never got the sense from Dell that they truly grokked the Small Office / Home Owner, and the  family student home purchaser.

My advice for them: Do not look to customer service for incremental cost cutting; they need to restore their prior, late 90s, full-on level of customer service  for which they were justly famous.


UPDATE: July 21, 2006 11:45am

A commenter in the prior Microsoft discussion partially blames Redmond for Dell’s issues:  Their screwup in not getting Vista to market on time is hurting the entire PC sector.

Interesting thought . . .

Category: Corporate Management, Earnings, Technology

Category: Corporate Management, Earnings, Investing, Psychology, Technology, Web/Tech

Do the Math

Category: Data Analysis

Fed Reality Check

Category: Federal Reserve, Financial Press

Are Studios Front Loading Movie Releases?

Category: Film, Finance

One Day Wonders or True Bottom?

Category: Investing, Markets, Technical Analysis

Bernanke & the Markets

Category: Federal Reserve

Random Walk and Outperforming Fund Managers

Category: Data Analysis, Investing, Markets, Psychology, Technical Analysis

Don’t Press to the Downside

Category: Markets, Psychology, Technical Analysis, Trading

Media Appearance: Kudlow & Company (7/18/06)

Category: Media