Dell, Inc. (DELL)

mingusdew (99.58) Submitted: 1/23/08 12:15 PM

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I too work in IT and I agree with most all of what you say. Dell is still the best value in desktop PCs for both the home and office, regardless of what Wall Street seems to think at the moment. We're getting ready to upgrade all of our user's desktop PCs (roughly 500) and we're going to be upgrading old Dells with new Dells. HP servers are great, but I could never recommend their desktop hardware to anyone over a Dell. And outsourced tech support, as you said, is universally bad across the board.

I just bought a new Dell 2407WFP-HC monitor and absolutely love it, and I've never had any serious issues with any Dell hardware I've purchased (hopefully I didn't just curse my new monitor). To me this stock is severely undervalued and I'll be adding some shares to my real portfolio once the dust settles.

In my opinion, Dell's worst enemy right now is Apple, and how they've changed the market. Home computers aren't just grey boxes anymore, people want their computers to fit in with the rest of their homes, a lot like how the living room TV has become a "home entertainment center." All traditional PC manufactures have needed to try their hand at stylized PCs lately and it's worked better in some cases than in others. Dell's efforts have been hit or miss, and many investors haven't been impressed despite Dell's earnings strength. Which leads me to the only part of your analysis I disagree with...

...your assessment of Apple seems a little short sighted, IMHO. At this point I'd say Apple is far from a fad, they've done a very good job of expanding their niche and I see no reason for that to stop in the foreseeable future (especially considering MSFTs recent missteps with Vista). I feel the stock is ridiculously overvalued, but Apple has successfully leveraged marketing and image to make themselves a relevant tech company again. They know how important it is to maintain this image and they won't let it go, at least not as quickly and easily as the word "fad" implies. IMO, any company capable of releasing a product as gimmicky and ineffective as the iPhone SUCCESSFULLY has a wide enough moat to be taken seriously. Apple fanboys are growing in number and not easily swayed; many will argue to the death that their iPhone wasn't a waste of money.

For the record, I've never liked Mac OS and still don't. I don't like Vista either, and think Dell should continue offering XP indefinitely (though sadly they probably can't, without angering a certain critical vendor).

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valunvesthere (< 20) Submitted: 1/30/08 1:47 AM

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Hello mingusdew,

I disagree with you that Apple is Dell's worst enemy. The last time I've checked Apple is 5% and PC is 95% of the world market. That's why Apple recently integrated their CPU's with Intel and offered users Windows OS.

This is reason enough for me to believe they no longer can survive by being different and must be a PC or should I say Apple is a PC. Those Apple TV commercials will have to change, where it's PC vs PC. Also the last time I've checked there's way more software available for PC's than Apple's.

So my final conclusion, while Apple is steadily morphing to become 100% or technically correct 99.999...% PC, Dell is way ahead of them in the PC ballpark. The threat to Dell is Hewlett Packard. Just visit Dell kiosk and compare Hewlett Packard at big box retailers. Better yet dell.com and hp.com .

From Valunvesthere.

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valunvesthere (< 20) Submitted: 2/29/08 11:47 PM

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Dear dkth,

I agree Apple is a fad, the last time I've checked Apple is 5% and PC is 95% of the global market.

Also the last time I've checked Apple made most of their money not from their core business (computers), but from I-pods and I-phones. Thus giving me reason to believe they're losing to PC's in the computer business and moved on to new ventures.

Finally to solidify my opinion Apple has broken tradition of strictly Mac OS to now offering Apple/Mac users Windows OS getting into the PC ballpark which the other PC manufacturers are way ahead in the top of the 9th inning.

Sincerely Valunvesthere.

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lindahailey (< 20) Submitted: 3/27/08 4:49 PM

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we took with us 5 brand new dell labtops to shanghai. one year later all 5 have had hardware problems but my tosheba ihas had no probleems what so ever. the dells were junk.

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mingusdew (99.58) Submitted: 5/13/08 10:43 PM

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Valunvesthere,

I think you may have taken what I said earlier out of context.

I realize Dell is more closely in competition with HP, and was simply pointing out the shift in focus Apple brought to the consumer PC industry. Function no longer sells by itself, and if it does it's because the PCs were priced so cheaply that margins have been squeezed to death. This to me is why Apple is Dell's (and subsequently, HP's) worst enemy. They have the "form" aspect of consumer electronics and computers down almost to an art. This has given them a competitive advantage Dell and HP have been trying rather hard to capture, with several successes and failures along the way (Dell's XPS line is great, but does anyone remember when they were offering ridiculous looking skins as upgrades on their laptops?).

Apple came out of nowhere, at a time when PCs were becoming a commodity, to show companies like Dell and HP that the only way to sell computers with the kinds of margins they were used to was to make the consumer willing to pay for something intrinsic, not just the computer itself. Dell and HP simply weren't ready for this shift.

As an aside though, that 5/95 percent spread, at this point in the game, really only gives apple more room to grow. While apple may or may not take advantage of that opportunity, the potential is certainly there and so is the momentum.

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