Yes, in response to a comment in an earlier post, it is indeed tempting to point to design as the answer. Causality after the fact is always a sticky area but… after my posts on Dell and HP etc recently, how could I resist an observation on the current buzz? In short, Dell’s stock plunged and HP’s shares rose. And in an attempt to inject some objectivity into this post, I’ll just select some snippets instead.
From E-commerce News,
Still, of all the results HP
posted, the PC numbers were the most intriguing on a competitive level
given the changes afoot in the desktop and notebook computer space. HP
said notebook sales were up 27 percent and that profit in the division
was up nearly 70 percent year-over-year to 3.6 percent of revenue.
Not only has Dell hit a tough patch after years of making gains on
HP and other rivals, but new competition from overseas players such as
China’s Lenovo is seen creating new pressure to produce PCs at lower
costs at a time when some analysts say Dell has made the process as
lean as it can be.
From MoneyControl India,
HP’s new marketing strategy is betting that all users of PCs really want to know one thing – beyond all the configuration and tech specs – they all just want to know: what can this machine do for me? And HP’s answer is: virtually anything that’s useful and fun.
The new Tianyi models are providing users a fresh experience with
the up-to-date technologies. The new models also won the prestigious
"Red Dot" award for its innovative designs. From "made in China" to
"created by China", the company says "innovation is Lenovo’s future".
Xia Li, Vice President of Lenovo Group said: "Innovation will
be the key force to push Lenovo forward, and the foundation for future
So why these three disparate posts? For one thing, the pattern that I see here has less to do with the concept of the physical design of the boxes themselves, atrakasya, but more to do with the application of design thinking – call it what you like – the fundamental fact of which is 1. understanding your customer 2. attempting to fill that need. By that measure, whether it’s design awards won by Lenovo and Acer (both Asian btw) or whether’s it’s HP’s attempt to connect ‘personally’ to their customers’ needs, Dell’s competition has more similarities in common with each other than with Dell. That is, not one is imitating Dell’s cost leadership strategy alone. Sure they are streamlining their processes to make them leaner, but they are not standing on that point alone. They’re adding that ‘missing something’, connecting on a visceral level with their customers rather than just the bottomline level.
On the other hand, that point alone – cutting costs, going leaner, discounting retail prices – forms the whole of Dell’s strategy.
It could be argued that this strategy works for large corporations who are buying PC’s in bulk, Dell’s major customers. But then why aren’t the results demonstrating the validity of this argument?
Smart Money is feeling confident that the day of the PC is not over, but I am tempted to say that the day of the "box" is over, and to quote HP, "The computer just got personal again".
[interesting update] Found this little partial article dated Nov 2005 with a Michael Dell quote,
"We believe that the quality and nature of the
customer relationship and experience is going to be the next
—Michael Dell, CEO