| | Dell Is the Bore of the Century...
By Monica Rivituso Published: August 11, 2005
DELL (DELL) COULDN'T BORE me more.
It is a model of efficiency and a profit machine. It has single-handedly revolutionized the PC business. It's also about the most predictable, tedious company in the entire tech sector. There, I said it.
This might seem blasphemous considering that Dell has cranked out impressive profit and revenue growth for, like, a thousand consecutive quarters. The stock remains a core holding in every tech investors' portfolio. Books have been written about Chief Executive Michael Dell's innovation. He invented electricity, was the first to slice bread and cured polio. He makes Henry Ford look like a loafer.
Yawn.
When Dell posts second-quarter results after the close on Thursday, lots of tech investors will be watching, but I won't be one of them. Honestly, after years of studying the company's quarterly reports and listening in on conference calls, there's really no need. Here's what will happen: The manufacturing dynamo will at least meet, if not top, Reuters consensus estimates of 38 cents a share on $13.7 billion in revenue (compared with 31 cents a share on $11.7 billion in revenue a year ago). The company will back third-quarter guidance, maybe sprinkle in some optimistic comments.
Then management will wax eloquent about the company's continued market share gains and its opportunity to gain even more share in the future at the expense of the usual suspects: Hewlett-Packard (HPQ) and Gateway (GTW). Is any of this news? Market research firm Gartner already estimated that Dell accounted for 17.9% of world-wide PC unit shipments in the second quarter — up from 16.6% a year ago. Dell is king of the world. We get it.
There will also be talk about squeezing out even more efficiencies and making further headway into the printer and server markets. Uncertainty surrounding competitors? Dell will crush them by hawking billions of PCs, computer peripherals and consumer electronics and rock-bottom prices. No matter what H-P, IBM (IBM) or, frankly, Martha Stewart, does, Dell can do it better. The company will prove that it's become the Wal-Mart (WMT) of the computing and consumer-electronics world. And really, there's no greater achievement.
So, this is where we are. Thanks to Dell we have a shining model of American manufacturing at its most boring. Thanks to Dell our landfills are fat and full of discarded computers, monitors, shards of glass and splinters of putty-colored plastic. Our groundwater is tainted with petroleum-based chemicals. And our lives are made all the more mundane by one more company that has so streamlined every nuance of a process that there isn't a drop of innovation left to write about, much less care about.
Yeah, Dell is pushing into China. It's selling flat-screen televisions. It might as well start selling razors and potato chips. Dell's just another virtual big-box retailer. It's no innovator. It's a widget maker whose parts are well oiled.
Now, if Dell delved into the waste-management business, mobilized its world-wide work force to knit alpaca ponchos for underprivileged children or cooked up some money maker of a reality show with David Cross that could be digitally downloaded onto every gadget it sells, maybe then it would pique my interest.
But this isn't a sexy story anymore. It isn't even interesting. Dell's shares have been dead money for much of this year. The stock has slumped 6%, while the Nasdaq has slowly regained its footing to about breakeven status.
If I might be so forward, Mr. Dell, you need to shake up your company's image. Do something bold. Create something. Pick a fight, trash-talk Bill Gates (go ahead, make his day). Better yet, miss a quarter. Really screw up your forecasts. Run afoul of the SEC. Then you'd be a turnaround story.
Then, you'd be interesting.
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