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Mike Dell :"Confirmed: Apple is Outta Buisness"

post #1 of 134
Thread Starter 
Have you seen the Buisness Week article yet?

"Apple cant make killer new hardware for much longer, and sucking away R&D funds if they dont expand maeket share"

Somebody put a bullet in Mike's head. Please.
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post #2 of 134
He must be sh*tting his pants. Who is he going to copy if Apple goes down?
post #3 of 134
Media folks like to get this stuff out of him. It's a sport for him and them.
post #4 of 134
Steve Jobs ought to point out that Dell can't keep slashing their margins without eventually putting themselves out of business, to say nothing of quite a few of their rivals. Sheesh, at least when Apple sells a desktop, they make a profit on it.
post #5 of 134
I agree with David R. Apple is a resource for other computer companies for free R&D. If they go, who the heck is going to inovate in the computer world?
Even worse is that there'll be only one major computer type to choose from. Wintel.

I don't know about any of you people but I prefer competition in business. It helps drive down costs and gives us choice. I don't want to have to choose wintel in a box built by compaq or dell or gateway, etc...


- Mark
post #6 of 134
steve said it best...apple competes through innovation. dell competes by being wal-mart.

dell may have marketshare, but they'll never have style. as long as mike is CEO, they'll never have class either.
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post #7 of 134
**** Dell.
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post #8 of 134
How hard would it be to believe that Dell or others have planted a mole in Moto/IBM to sabotage the chips?

I mean, it would only cost them a few hundred thousand dollars to have someone mess up chip, or fake a test, or drop something.

I'd bet this goes on to some degree.

Apple just needs a mole in Intel is all.
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post #9 of 134
Jeez, how many years is it now that we've heard about Apple being dead?
Abso-friggin-lutely incredible!!! No matter what Apple does, they're always on the verge of death according to some people.
post #10 of 134
[quote]Originally posted by koffedrnkr:
<strong>steve said it best...apple competes through innovation. dell competes by being wal-mart.

dell may have marketshare, but they'll never have style. as long as mike is CEO, they'll never have class either.</strong><hr></blockquote>

Everybody knows that when you feel overshadowed you tend to lash out irrationaly..right? Michael Dell lashes out too much to be taken seriously in the business world. He makes himself and his company look rediculous.

How long has Apple been in business? How long has Dell been in business? That's what I thought.

MIKE SUCKS!

[ 01-18-2002: Message edited by: Macintosh ]</p>
post #11 of 134
Got a link?

Jet
post #12 of 134
Does that asshole ever shut up?
post #13 of 134
[quote]Originally posted by EmAn:
<strong>Does that asshole ever shut up?</strong><hr></blockquote>

Me or Dell? :confused:
post #14 of 134
How else would Mike Dell get any media attention? The guy couldn't come up with a plan to wipe his ****ing ass by himself.

I think the article is great. He's just showing everyone what a narrow minded prick he really is.

His idea of innovation is trying to figure out how to cut $1 off the cost of a generic looking ****ing box. Please.
post #15 of 134
The depressing thing is that, in our dog-eat-dog capitalist society, the business community really thinks Mike Dell is tits, despite the fact that the man has contributed nothing to computing, apart from maybe a better way to manage channel inventory. Yeah, they'll be naming high schools after this guy ...
post #16 of 134
They used to say "Apple's been going out of business for twenty years... and it'll probably be going out of business for fifty more."
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post #17 of 134
[quote] Yeah, they'll be naming high schools after this guy ... <hr></blockquote>

Yea those ghetto gang land schools they make horror moveis outa the student gangs fighting cyborg teachers...
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post #18 of 134
There is no honor among thieves. I can't wait until Microsoft puts the knife in Michael Dell's back.

Let's face the facts. Without Microsoft Windows, Dell has absolutely no value as a company. It's like McDonald's without ground beef.

Does Microsoft need PC makers forever? They are moving into home appliances and are supposed to come out with the HomeStation soon. With a web browser and digital device capabilites, they will be competing with Dell as the families second PC. Do you really need a full fledged PC for your second computer when the HomeStation can do the same thing?

Microsoft wants to take over EVERYONE'S business even the banks and credit card companies transactions. So if they can have a monopoly on their home device, why not? Why wouldn't they want to make some of the profits Dell is making? What's Dell going to do if Microsoft sets up an operation to sell 20 million HomeStations a year. Is Dell going to move to Lindows? We've assumed Microsoft had no real hardware aspirations but maybe they were waiting for the right time. And there is always a new generation and new minds at Microsoft so I'm sure someone has thought about it. There's a post PC world coming and Dell may not be invited.
post #19 of 134
Keep in mind that just by stating this publically, Dell is able to instill a certain degree of FUD (fear, uncertainty, doubt) in the hearts of computer buyers. Perhaps enough to keep them away from buying a new iMac, for instance.

Personal jihad aside, Dell has made a smart (albeit slimey) business decision by trying to keep Apple's marketshare from expanding by casting doubt on the company's viability.
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post #20 of 134
[quote]Originally posted by moki:
<strong>Keep in mind that just by stating this publically, Dell is able to instill a certain degree of FUD (fear, uncertainty, doubt) in the hearts of computer buyers. Perhaps enough to keep them away from buying a new iMac, for instance.

Personal jihad aside, Dell has made a smart (albeit slimey) business decision by trying to keep Apple's marketshare from expanding by casting doubt on the company's viability.</strong><hr></blockquote>


I think the declaration of Mike are made for internal politic.

I suppose (because i don't think Mike is fool enough to make declaration that brings nothing ) that many people from Dell are complaining that there is not enough innovation today. Saying the market of Apple is too small for such R&D developpement is a way to say that the strategy of Dell is the good one : the fewest R&D developpement, lot of publicity, and the biggest marketshare possible.

As a conclusion : I think this declaration are a way to answer to criticize about his strategy. In any case this declaration canno't have a serious impact against Apple.
post #21 of 134
dell should just keep his god damn mouth shut, stupid ass buisness men, all they do is put pc parts in boxes. Any jack ass with enuff money to start a company can do that. Their too big and mighty now, I bet they go out of buisness in like 5 years. The biggest reason that general people buy from them is thier "support" f that its like some one rapes you then calls you the next day to see if your ok. Once os X is totaly done and we have competitive mhz numbers, its gonna be a whole different story
post #22 of 134
Well, ignoring the rather inflamatory title of this thread, I agree with Michael Dell's comments entirely, and it's quite obvious Apple does too.

Look at the two companies' last annual reports -

Apple
Net Revenue - $5363 million
R&D costs - $430 million
% of Net Rev. - 8%

Dell
Net Revenue - $31888 million
R&D costs - $482 million
% of Net Rev. - 1.5%

Apple spends a frightening amount on R&D. Why do you think its pushing into bricks and mortar retail sales so hard, and constantly banging the "5 down, 95 to go" drum?
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post #23 of 134
Great, another Texan with too much importance. Clearly Dell feels threatened by Apple, otherwise he wouldn't say such things. But his FUD works well, as Moki poined out, it plants fear and distrust of Macs in PC users.
post #24 of 134
[quote]Originally posted by Nonsuch:
<strong>Steve Jobs ought to point out that Dell can't keep slashing their margins without eventually putting themselves out of business, to say nothing of quite a few of their rivals. Sheesh, at least when Apple sells a desktop, they make a profit on it.</strong><hr></blockquote>

Personally, I think Dell is an idiot. However, business-wise, he's an evil genius, much like that Bill guy in Redmond.

Remember their previous strategy? They were reducing their prices to force Compaq, HP, et.al. to follow suit. Dell increased their market share, made money, and hurt the competition all at once (we'll ignore the future ramifications of this practice for another time).

It's not always about who has the best computers. It's who can sell the most. And right now, Dell is <a href="http://apnews.excite.com/article/20020118/D7H4AF6O1.html" target="_blank">winning.</a> They're making money, and increasing market share. That's business.

Dell doesn't have to be the best. Is Microsoft the best? Exactly. Dell just has maintain their business model, and in the end, they'll win. Does anyone see Walmart folding up anytime soon?

Apple's biggest advantage is keeping their R&D cost high, so they can keep innovating. That gives them a market advantage. However, they still have to manage their business accordingly.

In any case, ignore Dell, or next year he's going to proclaim how he invented a computer with a screen on a stick.
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post #25 of 134
Apple's out of business? Damn, that sucks.
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post #26 of 134
[quote]Originally posted by Belle:
<strong>Well, ignoring the rather inflamatory title of this thread, I agree with Michael Dell's comments entirely, and it's quite obvious Apple does too.

Look at the two companies' last annual reports -

Apple
Net Revenue - $5363 million
R&D costs - $430 million
% of Net Rev. - 8%

Dell
Net Revenue - $31888 million
R&D costs - $482 million
% of Net Rev. - 1.5%

Apple spends a frightening amount on R&D. Why do you think its pushing into bricks and mortar retail sales so hard, and constantly banging the "5 down, 95 to go" drum?</strong><hr></blockquote>

Since Apple have $4.4 billion in cash they could finance 10 years of R&D without making a dime.

Dell lives on other companies R&D and they can't live without it.

BTW what does Apple plan to use the money on? They have been saving up for years now.

[ 01-19-2002: Message edited by: JLL ]</p>
JLL

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post #27 of 134
[quote]Originally posted by Belle:
<strong>
Apple
Net Revenue - $5363 million
R&D costs - $430 million
% of Net Rev. - 8%

Dell
Net Revenue - $31888 million
R&D costs - $482 million
% of Net Rev. - 1.5%

Apple spends a frightening amount on R&D. Why do you think its pushing into bricks and mortar retail sales so hard, and constantly banging the "5 down, 95 to go" drum?</strong><hr></blockquote>

i think the point you're missing is that dell and apple are entirely different types of companies. dell's R&D expenditures are low because as a company they really don't create anything. they stuff standardized cases with outsourced parts. period. their whole operation is geared building computers cheaply and then making a small profit on a vast number of machines. they need massive volume to sustain their model.

apple, however, actually designs products which require an R&D budget. their model is based on uniqueness...on getting people to recognize and pay for differences in design. since they don't sell billions of computers, apple needs to get good margins from every product it sells. hence the higher price.

if i were dell (and thank god i'm not) i'd be worried about apple gaining marketshare. if apple gains marketshare they can command better pricing on component parts. the money saved can then help them lower prices without reducing margin. dell may be a slimy weasel, but he's not stupid. nobody wants to compete against a superior product that's competitively priced, and that carries a larger profit when sold. dell's only advantage is "would ya' like a CDRW upgrade for only $30?". if apple can find a way around that, dell is going to feel it. the ibook is a great example of a superior product that is close enough to compete on merits and not just on price. no wonder he's spreading FUD. if dell's weren't cheap, why would anyone buy one?
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post #28 of 134
I agree Dell, is speaking only through fear and knowledge that Apple has something good going on.

However, the question is, how much of the general public actually notices innovation?

Unfortunately, the average consumer fits the typical Dell profile: price conscious, settles for mediocrity, understands little about Apple, is a follower.

The Apple retail stores go a long way in changing this but we need even more exposure. More commercials that show the innovative features of Macs with side by side comparisons against Wintel boxes.
(those first iMac commercials about connecting to the internet were great)
post #29 of 134
Dell's R& D expense of 482 million really took me back.


What/Where /How did they spend this money?

I don't see how they could have spent much more than $75 million.

Maybe R& D includes buying off politicians and paying for industrial spies?

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post #30 of 134
[quote]Originally posted by koffedrnkr:
<strong>i think the point you're missing is that dell and apple are entirely different types of companies. dell's R&D expenditures are low because as a company they really don't create anything. they stuff standardized cases with outsourced parts. period. their whole operation is geared building computers cheaply and then making a small profit on a vast number of machines. they need massive volume to sustain their model.

[Stuff deleted]</strong><hr></blockquote>
Dell and Apple are very different companies, and the points you make are absolutely valid, but entirely irrelevant.

The only way for Apple to make a profit with the kind of R&D budget is to increase its market share - exactly the point Michael Dell makes.

The reason I posted the figures above is to show how much Apple spends on R&D compared to Dell - competitors in the same market.
[quote]Originally posted by JLL:
<strong>Since Apple have $4.4 billion in cash they could finance 10 years of R&D without making a dime.</strong><hr></blockquote>
No matter how much the sun shines out of Jobs' ass, shareholders will not sit back and watch Apple's cash reserves finance its operations for the next ten years.

And if Apple keeps posting the kind of returns it has been of late for much longer, you wouldn't believe how quickly that $4.4 billion could disappear.
[quote]Originally posted by Junkyard Dawg:
<strong>Clearly Dell feels threatened by Apple, otherwise he wouldn't say such things.</strong><hr></blockquote>
Nonsense. Dell isn't in the least bit worried about Apple, and he has no need to be. Even if Apple doubles its market share in the next five years, it won't make a dent in Dell's share which will increase as its Windows-based hardware competitors disappear.

Dell is just pissy because he - quite frighteningly even more than Larry Ellison - wants to be Steve Jobs.
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post #31 of 134
I can't believe that a$$hole. And I can't believe that Apple just sits back and lets the $#!t slide. I'd be suing those mutherf**kers for slander.

Sleazy as Dell
post #32 of 134
[quote]Originally posted by Belle:
<strong>
Nonsense. Dell isn't in the least bit worried about Apple, and he has no need to be.</strong><hr></blockquote>

Education? Dell does worry about Apple - remember last fall?
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post #33 of 134
[quote]Originally posted by Belle:
<strong>No matter how much the sun shines out of Jobs' ass, shareholders will not sit back and watch Apple's cash reserves finance its operations for the next ten years.</strong><hr></blockquote>

It was a worst case scenario - Apple still makes a profit and they didn't lay off 10% of their work force as many other manufacturers did.
JLL

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post #34 of 134
[quote]Originally posted by JLL:
<strong>BTW what does Apple plan to use the money on? They have been saving up for years now.</strong><hr></blockquote>

You know the old saying, "it takes money to make money?"

That's what they're using it for. That's what Fred Anderson meant when he said that "Apple is a cash machine." It's investment that yields tens of millions of dollars in returns per quarter, and acts as collateral for debt so that Apple can borrow on favorable terms.

It's also insurance. Innovation implies risk, and if you're going to take risks you'd better have a big cushion underneath you. Especially if you're risking investors' money.
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post #35 of 134
[quote]Originally posted by Belle:
<strong>
The only way for Apple to make a profit with the kind of R&D budget is to increase its market share - exactly the point Michael Dell makes.
</strong><hr></blockquote>

Correct me if I am wrong, but aren't they already making a profit with this kind of R&D? If Apple were truly in a price war with Dell and the other box makers then Mike's comments would be perfectly valid. But they're not. Apple competes with the PC makers on a completely different level. I would argue that the reason Apple is still around is because of their R&D spending, not in spite of it. As long as Apple maintains its current marketshare it can continue to spend 8 - 10% on R&D without feeling any undue pressure on the bottom line. Apple's margins are close to, if not the highest in the industry, and their business model is designed around that necessity. That's the price for the R&D.

Mike Dell is looking at Apple through a very narrow lens, assuming that since his chosen business model worked for his company, no other strategy could possibly succeed. The fact that Apple is profitable, even in a recession and despite their R&D budget shows Mike's perception to be flawed.
post #36 of 134
Who the heck names their company DELL anyway?
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post #37 of 134
[quote]Originally posted by Fluffy:
<strong>Correct me if I am wrong, but aren't they already making a profit with this kind of R&D?</strong><hr></blockquote>
They posted a profit of $38 million for the first fiscal quarter of 2002, but this comes on the back of a net loss for the 2001 fiscal year. The quarter also saw a nasty drop in revenue, and despite impressive expectations for the coming year, the cost of getting the new iMac into production, and expense of new components (e.g. the iMac's LCD) result in an increased bottom line for the coming months.
[quote]<strong>If Apple were truly in a price war with Dell and the other box makers then Mike's comments would be perfectly valid. But they're not. Apple competes with the PC makers on a completely different level. I would argue that the reason Apple is still around is because of their R&D spending, not in spite of it.</strong><hr></blockquote>
You're making the same point as koffedrnkr, and it's irrelevant. Read the quote from Michael Dell in the first post of this thread - you know, the one we're discussing?

Whether Apple is in a price war with Dell or not (Which it isn't), Michael Dell can make any comment he likes, and his comment above is absolutely correct, and not at all derogatory to Apple. So why are people calling for Dell's head on a plate?
[quote]<strong>As long as Apple maintains its current marketshare it can continue to spend 8 - 10% on R&D without feeling any undue pressure on the bottom line. Apple's margins are close to, if not the highest in the industry, and their business model is designed around that necessity. That's the price for the R&D.<hr></blockquote></strong>
See above. Apple's bottom line is about to see some pressure, and if it's listening to the people here baying for faster RAM, faster buses, better graphics chips, etc. then it's going to see undue pressure.

You are right, Apple's margins are the highest in the industry, and this is intended to pay for its R&D. Unfortunately, this isn't currently the case. Apple needs to increase market share. Dell is right.
[quote]<strong>Mike Dell is looking at Apple through a very narrow lens, assuming that since his chosen business model worked for his company, no other strategy could possibly succeed. The fact that Apple is profitable, even in a recession and despite their R&D budget shows Mike's perception to be flawed.</strong><hr></blockquote>
A quarter with a modest profit does not make Apple a profitable company. A loss for the last financial year, a serious loss of revenue in recent months, and a worry about increasing revenue over the coming months and the profit made therein paints a much more accurate picture of a company that badly needs a larger share of the market.

The bricks and mortar stores are a desperate measure.

It's not all doom and gloom. I don't think Apple are going to disappear. But in the context of this thread, insulting Michael Dell for making a very astute observation makes people here look less than informed.
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post #38 of 134
[quote]Originally posted by JLL:
<strong>Apple still makes a profit and they didn't lay off 10% of their work force as many other manufacturers did.</strong><hr></blockquote>
See my post above. Apple made a modest profit for the first quarter of 2002, on top of reduced revenue. They made a net loss for 2001.

And just because you didn't see any headlines, don't assume that Apple didn't lay off a large number of its workforce. Read <a href="http://www.siliconvalley.com/docs/opinion/wiretap/pd110901.htm" target="_blank">this</a> and <a href="http://www.thinksecret.com/features/headcount2.html" target="_blank">this</a>.
[quote]<strong>Education? Dell does worry about Apple - remember last fall?</strong><hr></blockquote>
Dell was just looking to protect a valuable market. If the company lost its entire education customer base, it would survive just fine, albeit with much reduced revenues. I doubt Apple would.

[ 01-19-2002: Message edited by: Belle ]</p>
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post #39 of 134
[quote]Originally posted by Belle:
<strong>
See my post above. Apple made a modest profit for the first quarter of 2002, on top of reduced revenue.</strong><hr></blockquote>

It was a 37% increase compared to the same quarter last year.

[quote]Originally posted by Belle:
<strong>
And just because you didn't see any headlines, don't assume that Apple didn't lay off a large number of its workforce. Read this and this.

</strong><hr></blockquote>

Rumors are just that - rumors.
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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post #40 of 134
Belle, I think we are arguing different sides of the same coin, or perhaps we aren't even in disagreement at all. You obviously understand the need for Apple to innovate... they couldn't survive otherwise. The question is what marketshare are you referring to? if you mean that Apple needs to expand their share over this last quarter, then I agree. Last quarter was terrible, due in no small part to the stagnation of the desktop lines. But as long as Apple can maintain their average over the last few years of 4-5% I don't see them being in any real trouble. However, I don't think that this is what Dell is talking about. He seems to be saying that Apple needs to expand to &gt; 6% to continue doing what they are currently doing, and I disagree with that sentiment.

There is a bit of concern over the next few quarters, but that concern is that Apple will lose sales, and lower its marketshare despite the R&D spending. This is a very real possibility, but it has nothing to do with Mike's statement. As long as Apple maintains both its marketshare and its margins, they will be able to continue creating new hardware designs. Every scenario to the contrary is based on lowering Apple's share or reducing margins.
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