Dell Applying Creativity in China to Offset Western Market Fall

Rob Enderle

It is easy to get depressed when we see the massive drop in our retirement portfolios and falling valuation of our homes. But unless we need to sell near term, neither is the big problem. The big problem is falling consumer confidence and the poor performance of the western market. This is jump-out-the-window stuff, but you can either let it get you down or aggressively move to take advantage of the opportunities that will result and/or focus on things that will more than offset this market downfall. Millions can be made simply by not focusing on the negatives like most others will do.

 

I'm in China as a guest of Dell this week, getting a deep dive of its biggest initiative. This initiative is focused on becoming dominant in what most believe is a market that will eclipse the U.S. and European market combined in a few years. I'm talking about Asia Pacific in general, China in particular, and Dell's massive plan to truly be a multinational by focusing on this geography.

 

I'm taken by the fact that Michael Dell, who runs Dell, and Steve Felice, who runs this very important unit, are focused like lasers not on the problems they can no more address than any of us, but on the massive opportunities this market represents.

 

Driving Change

 

While the company is known for direct sales, Dell now has over 15,000 stores carrying Dell products and over 25,000 partners who help sell Dell offerings. Dell realized early on that mobile was the future and made a substantial move by enhancing and building out its notebook lines. Dell does not believe in the one-size-fits-all model.


 

For instance, I'm typing this post on a custom notebook with a Michael Ming design on the cover, which was created using a print technology. Look across the consumer laptop lines, which are generally used by small business, education and executive customers; they have more colors, more unique designs, and more choices than almost every other single vendor.

 

This need for variety goes to the core of the Chinese market, which sees over 100 new unique cars introduced into it every year. Simply walking through a Chinese store, you will see a massive number of choices from all of the vendors. This speaks to why Apple has not done well here; it simply doesn't offer enough choice.

 

Going Native

 

Dell has moved its design center to Shanghai, which I toured, along with a number of other international analysts and journalists. The leading example was the new Studio Hybrid consumer desktop, which is very small, yet customizable through skins, including one made out of bamboo. This is one of the most ecologically friendly products created for the segment. These changes are coming out of China which, increasingly, given the power of that market, will be driving much of what we buy for everyone operating on a global scale.

 

Dell Latitude ON

 

One of the coolest new features Dell will be driving into the laptop space is Dell Latitude ON. The laptop boots into a light operating system, allowing you to do basic things and giving you multi-day battery life. However, this is based on Linux, which would be used in addition to Windows, and this multi-OS kind of solution has never been popular with IT becasue of the cost of managing a second non-aligned OS. I still think the RedFly concept is a better way to do this because it provides the additional benefit of a single WAN connection for the notebook and the cell phone.

 

Still, we will see a number of vendors explore this idea of a laptop that can provide multi-day battery life and push back on the move of smartphones into this segment. Otherwise, those smartphones may displace laptops in a few short years.

 

Drinking the Kool-Aid and Wrapping Up

 

Part of the problem with attending an event like this is that you can easily be taken up by the positive message and lose track of other things that may be more important. The facts that Dell doesn't have a smartphone effort, has drifted behind HP in the PC market, and lags Apple in margin performance are reminders that all things aren't perfect.

 

Still, this was an impressive event. Dell has its top people focused on turning the company into a powerhouse in China, a market that is quickly becoming the most important in the world. Even more crucial, it is showcasing what can happen if you put the negatives of current events behind you and focus instead on the opportunities. The problems we have today will pass and companies like Dell that focus on success in the future will likely be best positioned to benefit from it. Something to remember as we make our own life choices.



Add Comment      Leave a comment on this blog post
Oct 25, 2008 8:32 AM Sandesh Dahal Sandesh Dahal  says:
A technology that intrupts ones free living and freedom . Reply

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