As an analyst, I write a lot of reports (actually “powerpoints”) and like to read a lot of analyst reports. Sometimes I’ll have an “ah” moment-this guy is just genius and he said something that I want to say but can’t with the same clarity, logic, cleverness or sense of humor. However once a while, I can also get an “hm?” moment when I think either the guy is too smart for me to understand or this is just a dumb report.
I had one of these “hm?” moments today when I came across a commentary made by Eric Auchard, titled “A brutal logic to Dell’s reinvention” and you can read the whole article here http://tr.im/tR82 Particularly this paragraph:
“Dell’s current reliance on PCs also has an upside as it leaves it best-positioned among major computer makers for a long overdue upgrade of ageing corporate PCs set to start later this year with the introduction of Microsoft’s new operating system, Windows 7. “
Don’t get me wrong. As a Dell employee, I certainly wish that we are “best” positioned and I work very hard to help make that happen. However I just can’t really understand Eric’s logic here. Some questions I have:
- Why Dell is more reliance than other PC manufacturers? Dell is not the king of PC any more. Why HP and Acer is less reliance than Dell? You can kind of argue that HP has a much broader portfolio than Dell, but what about Acer? PC is the only thing they make!
- Why overly reliance on PCs is a good thing? Notice I am not saying it is a bad thing. I am saying it is not a relevant question here. For enterprise customers or consumers alike, nobody is going to analyze how much reliance Dell or HP has on PCs and then make their purchase decision. They are going to look at the product, price, services everything and then make their decision. To assume there is a direct correlation between reliance and the quality of products and services and pricing competitiveness is a serious mistake. We all know HP sometimes is more aggressive in PC space because they have a huge profit pool with their printer business.
- Finally, I think it is too early to say that the introduction of windows 7 is going to shake up the whole PC purchase cycle. And if that cycle does come to reality like everybody is wishing, it is a “rising tide” effect and everybody will get a free ride. The question is who will grab a bigger pie? The answer to that question again, is on the overall competitiveness of products, prices and services, which Dell is making tons of progress, but not its reliance on PCs.
Ok, maybe I am just too dumb to understand what Eric exactly has in mind when he made that statement. What about you? What do you think? Agree? Disagree?
