In this weekend's Barron's magazine, Jay Palmer wrote an article Beyond the Battery Mess (subscription required) about Dell Inc. (DELL).
Given your huge recall of Sony batteries in laptops, do you agree that cost cutting also affected your quality?
Rollins: Not at all. The batteries were a quality problem not at Dell but at our supplier. Sony (SNE) makes the battery cells and we assemble the battery packs to Sony specifications. We made a larger recall than we probably had to, because of our commitment to restore faith and confidence in the company. A point you might want to consider is that we used only 18% of Sony's battery output for the period. Where did the rest go? [Two days after the interview, Apple Computer (AAPL) recalled 1.8 million Sony batteries. Sony said it doesn't expect further recalls.]
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Your R&D people have shown me a slew of possible desktop PC concepts, including some shoebox-size units that could sit under a monitor. Will these come to be?
Rollins: We are working on them, and they might or might not happen. The point you must remember is that 80% of our business is corporate, and corporations don't buy on design.
I found Rollins remarks concerning batteries interesting. He is certainly challenging the rest of the manufacturers and Sony to fess up. And I found his remarks concerning design interesting as well. While I am not big on what a computer looks like, many are. And while many in the corporate world do not care about the computing box, I cannot help but wonder if that will change. Will corporations be willing to spend a slight premium on personal computers to have their offices looking a little more organized, efficient and appealing? Corporations already spend a considerable amount on office furnishings.
Rahul Sood, who is the president of and chief technology officer for VoodooPC, wrote a terrific blog article Where there's Smoke there's Fire....
Getting to the point of this article, I believe that Dell lost its way a long time ago. I remember Kevin Rollins was once quoted as saying the Apple IPOD was a “fad”. You know you’re in trouble (or at least I did) when the CEO of one of the largest PC company's on earth didn’t understand the real strategy behind the IPOD; yet there were some of us who saw the light. I couldn't believe the CEO of one of the leading PC companies couldn't see the pending revolution behind something as iconic as the IPOD...! Like WTF?
After reading Sood's comments, I wonder if Rollins is, once again, too dismissive of a fad
? I encourage you to read both articles and come to your own conclusions.
As for me, I am generally avoiding, though not completely, technology. As I have written numerous times, I am generally cautious about the economy, especially in light of the weak housing data. So for the time being, I am more than content to stay on the sidelines and watch how this situation plays out.
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