Why is Dell Seeing a Sales Slump?

Dell is one of the largest computer OEMs (Original Equipment Manufacturers) currently operating in the world. Based in Austin, TX, it’s a company that I and another of my relatives have worked for. You can find Dell systems in a great deal of enterprise corporations around the world, and more than a few people I know (including my parents) are loyal Dell customers.

So what has caused such a slump in Dell’s business this year? There are a number of factors, and in this article I’ll share what I think may have caused this. We’ll also share some feedback received from small business owners and enthusiasts within our Gnomies community.

Strong Competition

Why is Dell Seeing a Sales Slump?Apple has grown by leaps and bounds over the past few years. Enterprise market share (an area once dominated by Dell) is increasing for Apple, causing Windows-based PC manufacturers like Dell and HP to take note. It isn’t enough to make the “best” Windows workstation out there. You now have to make a workstation so good that it convinces corporate buyers not to go with Apple. Since Apple has captured over 90% of the high-end laptop consumer market, it stands to reason that the very people making buying decisions for their enterprise are quite possibly already customers.

Tablets and mobile computers are another area in which Dell has been slacking. Tablets are the biggest selling computers out there outside of smartphones, and with Dell failing to gain ground in this area since the Windows XP era, it’s not terribly hard to see just how badly this can impact a PC company.

Lack of Buzz

Advertising makes all the difference in the world to companies that are facing stiff competition. Dell hasn’t had a successful advertising campaign since its moderately annoying, “Dude, you’re getting a Dell” campaign kicked off about 10 years ago. Meanwhile, Apple and HP have made headlines with their ads regardless of the public believing them to be good or not. Yes, Dell has commercials running and plenty of print advertising (particularly in market publications), but I want to see something that turns my head. Otherwise, Dell as a brand is kind of boring.

Colored laptops are great, but they look pretty bland compared to the artistic design found on HP’s machines or the unibody frame found in the MacBook Pro. There just really isn’t a lot to get overjoyed about.

Innovation is another area where buzz can be quickly generated. As George Oberdorster, a member of the Gnomies community, conveyed: “Lack of innovation is definitely Dell’s problem. Dell never focused on just a single product, and hence it fell behind. If you notice, Apple focuses on one product — let’s say iPhone first gen — and scraps the rest until it’s mainstream. Apple scrapped the iPad until iPhone gained market share. It also learned from its mistakes. Hence, that is a main reason why Apple is on top at the present time.”

Waiting for Windows 8

About a quarter before Microsoft releases a new OS, there’s usually a slump in sales. This is due in part to people not wanting to go through the hassle of upgrading right after purchasing a new system. There’s also a delay because some folks want to try Windows 8, but because it hasn’t been released to the public officially yet, there isn’t enough info about just how good (or bad) it might actually be.

For most corporations and consumers out there, what they have right now is just fine. Why upgrade what isn’t broken?

Image: Yahoo Finance

18 comments On Why is Dell Seeing a Sales Slump?

  • Hmm, if you look at the time where sales dropped… this is where the Google Panda and Penguin was at the most highest of it’s modification stage of their algo… That is what I would look at if I was Dell… 

  • Dell and HP are in the same boat. consumers are going for the newer brands like lenovo and Asus (and Apple). PC’s from HP are dead and i think dell is soon to follow.

  • Dell needs to get with the times. (Says me, typing on my Dell PC) This was a bad quarter for everyone, wait for next quarter, when Win8 will be out. The good thing about going down is that there is always room for improvement!

  • Dell just isn’t innovating anymore and there few attempts at mobile were not successful

  • Dell has always been an iffy company to me. They made cheap products that worked cheap. This isn’t a surprise to me.

  • It’s a bad quarter. But lets hope that when Windows 8 comes out, Dell has some ideas in mind for a good looking, touch screen computer.
    For schools, and businesses, Dell is the number 1 computer. So, they had a bad quarter. Maybe they will pick up, for the upcoming school year. Maybe.

  • the PC market is saturated. How many pc dell can sell when you companies like asus and acer selling cheaper pc. I cant see my self buying a good dell pc for 1200 when i can add a few more bucks and get a mac.

    • This exactly. I prefer asus myself. Just about everyone I talk about computers to online says good things about them. Then if you mention dell, they act as if you just mentioned AOL. So dell is obviously doing something wrong somewhere.

  • I don’t really think innovation is the problem with Dell. It’s how well they can unify the OS with their hardware. Look at the Mac, it’s made to work specifically to the OS. A PC is built to just work. If Dell could somehow take advantage of the new features is Windows 8, it might just pull itself out of the gutter. They need to show the average consumer the benefits of using a Dell: What can I get from Dell that I can’t get from every other brand out there?

  • I believe Dell has gone through tough times before. Maybe Dell will come out with PCs that use all the new features of Windows 8 (PCs with touch screens, perhaps) and thus will knock everyone’s socks off. There is probably not just one reason Dell is going through a slump. There is probably not one thing that will get them out of the slump. Only time will tell.

  • well I was out in very early spring I needed a new lap top, my dell had quit working, went looking around many places there were no dell out there to be bought at any price no one was selling them at any price ..
    there were no desk top in anyones of the shelf line up , HP, acer and Asus were the winners and taking all the display space, at best buy hp was offering a trade in deal best buy also had 2 different notebooks on sale ended up getting a new HP lap top for under $230 can’t beat that ..

    in june my wife was out time for her to get a new lap top, we went shopping around many places no dell any whereto be seen or had, one store did have lap top on a hot blowout sale not new though these were old new stock they couldnt get rid of from a few years back..

    acer when she went out was the big winner they offer a$75 trade in for the old working or dead laptop and several model were also on sale, so brand new acer it was for under $230 you cant beat that ..

    everything else out in all the stores where we shopped were pushing ultrabook and they still are at this time priced up in the over $1000 category between $900 and $1500 ..
    the rest of the offers were mainly tablets readers and yes they were even sales people touting the positive points of getting tabet or smart phone as your next computer ..

    dell did not go over looked they just were not out there for sale any where at any price ..

  • I, a once loyal customer of Dell, have had bad experiences recently. I guess that makes me kind of biased? Well, lets just say that the new dell systems I have are junk and the old c600 laptop I have is running stronger than the new ones. I think Dell may just be bringing this all on themselves. They aren’t like the other companies. Customers want flashy, fast systems. If you can’t provide that, this happens.

  • I think dell used to sell on support or at least the marketing of their support. People would buy from them because computers were expensive and they wanted assurance that if they had a problem they could call someone. That was their major selling point. Then those people called dell and got someone on the phone that they couldn’t understand talking about stuff they didn’t understand. Now they have a reputation for poor support. People are a lot more computer savvy nowadays. More people know how to avoid problems in the first place and if they can’t fix things themselves they likely know like 6 people who can.

    Besides. People’s parents and grandparents have Dell’s they’re not cool anymore.

  • “Since Apple has captured over 90% of the high-end laptop consumer market”

    LOL! Who comes up with crap like this? 90% of the “high-end” market? GIve me a break. There’s a laptop market, plain and simple. Apple have a small minority share in this market.

    “Apple has grown by leaps and bounds over the past few years.”

    No they aren’t. They’re growing in mobile, ie tablets and phones. OS X and Macs aren’t growing, as OS X still languishes around 6-7% market share, while Windows still controls 90% plus. As for enterprise, only in mobile are they gaining. OS X and other enterprise level services are still dominated by Microsoft, along with Apache, IBM, and Linux.

    The biggest problem with the PC OEM space is the generic garbage they have flooded the market with. That’s why Microsoft made their own tablet, because they knew OEMs weren’t going to make anything that excited anyone. When these companies start making quaility, desirable products with great designs, instead of trying to race to the bottom, they will see their fortunes change.

  • Dell’s decision not to tackle the pad market is a major mistep as you mentioned. And I don’t remember a dell commercial I’ve seen in a long time, though I take your word that they are advertising. And as you also mentioned, it might be that everyone is waiting on the Win 8 release. One thing you didn’t mention though is the slump in the economy which can lead to what you said about ‘what i have is fine’. It’s a shame that Dell hasn’t spread out to other markets. Hopefully they will read this article and comments.

  • I thinl that they are kinda laying low for time being to see what the new Windows coming will be accepted or what…Maybe!!!!!!!!!!!!!!!!!

  • Having worked for them in the past this company it is bloated, mismanaged with a lack of direction and focus. Innovation is stifled in countless useless meeting and corporate red tape. How about that award winning tech support ? Nothing differentiates from anyone else and they’re a follower not a leader.

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Ryan Matthew Pierson