Dell's Computers Are Hot, But Not The Company - InformationWeek
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8/15/2006
01:29 PM
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Dell's Computers Are Hot, But Not The Company

Consumers are always looking for the next "hot" technology. But when at least one Dell computer reportedly burst into flames at conference in Japan, and the company on Tuesday recalled more than 4 million laptop batteries used in its systems, it put an undesired spin on the company's image in the market and highlighted a potentially hazardous situation.

Consumers are always looking for the next "hot" technology. But when at least one Dell computer reportedly burst into flames at conference in Japan, and the company on Tuesday recalled more than 4 million laptop batteries used in its systems, it put an undesired spin on the company's image in the market and highlighted a potentially hazardous situation.With security continually increasing for air travelers, there has been some speculation that airlines may eventually require that all mobile computers be stored in checked baggage. The prospect of a laptop exploding in a cargo hatch of an in-transit plane doesn't add much reassurance to our level of safety, however.

And while Dell laptops may be garnering a hot reputation, the company is undecidedly no longer a hot commodity in the technology industry. Dell's financial results are no longer the darling of Wall Street, and even the long-term viability of its once state-of-the-art "Dell Direct" model is being questioned. Dell at one time led virtually all polls in customer satisfaction, but news like the exploding laptops will only worsen the already deteriorating position of the company as one of the most trusted companies in the world.

Some executives at Dell must be wondering what else can go wrong.

An increasingly troubling problem at Dell is a loss of market share. In the server market one solution to that issue is expected to be a long-delayed move by Dell to add systems based on Opteron processors from Advanced Micro Devices to its portfolio.

But while Dell server competitors Hewlett-Packard, IBM, and Sun Microsystems on Tuesday quickly announced new servers based on AMD's new higher performance and next-generation Opteron Rev-F processor, Dell has yet to get an AMD-based system to market. Dell has said an Opteron server will be added by year-end. Is it better late than never?

More than a year ago Dell CEO Kevin Rollins talked to me about his company "grow(ing) into a broadly based and broadly acknowledged IT company. We think of it like our manifest destiny."

That destiny right now seems to be in peril as the once hottest company in the computer industry is now being forced to work hard to take the heat off its public image.

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