Dell, the company, isn't Apple, and Michael Dell, the man, isn't Steve Jobs. No matter how the farcical Dell buyout drama ends (yesterday, the denouement was put off yet again), everyone who isn't an investment banker or a major shareholder is going to lose -- big time.
The company is a mess, dragged down by its dependence on the dying PC market and the inability of Michael Dell and his team to come to grips with a changing world. Unlike Steve Jobs, who left Apple unceremoniously and came back chastened and refreshed with a head full of creative ideas and immense energy, Michael Dell wants to be the unchallenged master of his company -- without ever having left or shown that he has something truly different to offer in these changed times.
[ On the downside, Apple's brains are starting to drain away. | Apple's perceived innovation has also taken a hit -- Galen Gruman tells why it's not necessarily true. | Stay ahead of the key tech business news with InfoWorld's Today's Headlines: First Look newsletter. ]
It's a sad story. Dell revolutionized the computer industry, introducing mass customization and just-in-time supply chains that put an affordable PC on hundreds of millions of desktops over the decades. Dissecting the fall would take a Harvard case study, but a recent article by a British business professor highlights how Apple outfought and outthought Dell and the rest of the PC industry.
Apple, which has never had a dominant share of the personal computer market, earns 45 percent of the operating profits in the PC industry, according to Asymco analyst Horace Dediu. The top five sellers -- Hewlett-Packard, Dell, Lenovo, Asus, and Acer -- together make only 33 percent of operating profit.
Sure, Apple is facing serious challenges now, and Tim Cook isn't Steve Jobs. But what technology company doesn't face obstacles in a world that's changing so rapidly? Writing Apple's obit, as the digerati are ready to do, is a very risky bet. Writing it for Dell, by contrast, is not at all risky.
Apple's quantum business strategy
You've probably heard of quantum physics. But what on earth is a "quantum business strategy"? That, says Loizos Heracleous of the Warwick Business School in Coventry, England, is how Apple came to dominate the computer industry. The "quantum business" term comes from the notion in quantum physics that the same electron can be at two places at the same time, Heracleous tells me.
But enough physics. What he means is this: Apple has been able to combine two seemingly contradictory ways of doing business. It has the highest efficiency in operations of any company in its peer group, plus it has "outstanding serial innovation and addictive product design, both of which command premium pricing and redefine markets," says Heracleous.
Let's take that apart. Dell was rightly known for its mastery of manufacturing and the supply chain. But when it came to innovation, Dell was AWOL. In fact, Dell executives used to brag that their company's R&D budget was essentially zero. (Actually, some money was spent on product development, but not on research.) In any case, Dell produced very serviceable, but unremarkable, PCs that couldn't command a premium in the market.