RealTime IT News

How Dell Can Return to Prominence

If you've been paying attention to the issues at Dell recently, you probably know all about its woeful performance over the past few years. The company that once commanded the PC industry and became the prototype for how a company could dominate a hotly contested market with low margins is now slinking to the position of also-ran.

Dell is still the world's second-largest PC manufacturer -- a testament to its prior success more than its growth today -- but according to a recent report from IDC , a market research firm, the company's PC market share in the United States fell to 26.3 percent in the first quarter of 2009. Worse, the company's worldwide market share declined to 13.6 percent in the same period. But that's only half the story.

In the first quarter of 2008 -- just one year ago -- Dell commanded 15.2 percent of the worldwide PC market and 30.4 percent of the U.S. market. That's a drop of 16.2 percent and 16.7 percent year-over-year, respectively. In the meantime, the majority of Dell's losses have gone straight to HP, which enjoyed 2.9 percent growth in the worldwide market and 12.2 percent growth in the U.S. since the first quarter of 2008.

So, things are bad at Dell. And they're getting worse. The company is in real need of a wake-up call. It needs a new direction.

If Dell wants to know how to turn its business around and finally get back to its place of prominence in the PC industry, it needs to change things up. And it needs to do it quickly.

Customer service anyone?

What ever happened to Dell's customer service business? At one time, it was the leader in the space. Any company in the business was trying desperately to match Dell's offering. Now, it's trailing behind most competitors. Worse, it charges $99 per year for access to its U.S.-based representatives.

To fix its customer service woes, Dell needs to realize that when you're the leader, customer service is just as important as it is when you're not. The company needs to reduce wait times. And it needs to make a better effort to send customers to agents that really know what they're talking about. Sorry, but I don't want to reinstall Windows just because you don't know why my PC just went south on me. I want to save it. Now, do it.

Dell also needs to realize that providing U.S.-based customer service for a fee doesn't cut it. Yes, I know, it works for Apple. Here's the difference: Apple is a premium provider of a premium product. Dell provides a commodity to enterprise customers and consumers who want to save a few bucks. The company needs to stop charging for the premium customer service and start offering it as a free service. Too expensive? Build it into the cost of the machines. It adds value to both the enterprise and consumers. And it sells more computers.

Learn how to be cool

Dell isn't cool. It never has been. Since its inception, the company has focused too heavily on the cost of the computer instead of the design of the computer. If Apple has shown us anything it's that computer design really matters. We want something that's good looking. We want to know that people think we're cool because we have the nicest-looking PC on the market. Yes, it's vanity. But we don't care -- computers are an extension of who we are at Starbucks or the local Internet Cafe. If we look like our computer just walked out of the mid-1990s, we're not happy.

Better design translates into better sales. Dell is doing a satisfactory job, but it needs to work harder. Take a page out of HP's and Apple's playbooks and focus on design to entice consumers. It's a must.

Start innovating

One of the biggest issues I've always had with Dell since the fall is its insistence on being boring. It doesn't innovate much. It just stays in its realm and continues pumping out products for consumers who want the cheapest computers on the market. It worked once. It won't work any longer.

Just look at HP. That company has computers, a consumer-friendly in-home server, and a variety of computer peripherals. Dell has computers. Yes, I know that it tried to make the Axim handheld work. I also know that it still sells monitors. But many of those products are derivative. Where's the innovation?

We've been hearing rumors lately that Dell might be planning to release a smartphone based on the Android mobile operating system. That's a good start. But it needs to do more. Build a cool set-top box. Open that mobile phone business and start taking on Apple. Come up with some cool software packages that enhance our experience in Windows. Do something. Don't just keep producing computers fewer people want.

Dell is in a rut that it hasn't extracted itself from. And if it keeps playing this game of catch up, it will only continue.

Wake up, Dell. Trust me, it's time.

Don Reisinger is a technology columnist whose work has included popular columns for CNET.com, Computerworld, InformationWeek and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.