AliceHill.com - Where Technology Frolics

Dell Out, Profits Up?

Guest Editorial, Bill O'Brien:"Mr Dell will be replaced by Kevin Rollins, the firm's president and chief operating officer, from July. However, the company said Mr Dell would "remain deeply involved in the company's day-to-day business". Mr Dell founded the firm 20 years ago when he was a student. Last year the firm recorded sales of $41.4bn." So says a news report by the BBC late last week. The moaning and hand-wringing began almost immediately. But this could be a good thing, if, perhaps, Michael Dell isn't so deeply involved in the day-to-day ops.

Why is that, you ask? Take a look at Dell's line-up. Do you see an AMD system in the bunch? Oh, let me save you the trouble - the answer is a resounding, "No!" Michael has a long-standing feud with AMD such that while he's been able to match consumer pricing available from rival Gateway, Dell is not able to take advantage of the typically lower processor costs associated with AMD CPUs and that cuts into the profit margin. AMD is also very popular among a good percentage of the marketplace. Tied to systems with Dell's reputation for reliability and service, Rollins could add a significant number of new customers to Dell's base by incorporating AMD product.

Could it happen? Historically, people have cut off their noses to spite their faces with reckless abandon. Once you do that it becomes difficult to sniff out the direction from which the wind is blowing.
# Posted at 8:39 AM