Where to next for Dell?

PC giant sees future growth while its share price falls

It was Australia’s turn to meet the eponymous founder of Dell last week, with a small sprinkling of New Zealand media joining in to listen to the man who founded a US$60 billion company, and to interrogate him on the future of the business.

However, if the assembled media expected to receive some straight directions on where Dell is headed, they were left sorely disappointed. Michael Dell was cagey in the extreme, clearly having received media training from the best in the business, and avoided answering daft and tough questions alike with aplomb.

Tough competition from rivals like Hewlett-Packard has seen Dell’s share price almost halve over the last 12 months, and the direct-sales model PC maker is looking to the Asia-Pacific region for further growth instead of the US market.

Dell has been hit by customer dissatisfaction over support and quality issues lately, and is currently in the process of recalling some 4.1 million Sony-made notebook batteries, which pose a risk of exploding.

To address these issues, Michael Dell says the company is spending around NZ$165 million on improving customer service, and hiring more people. Regional Dell head Joe Kremer says that by delivering systems to customers roughly seven days after the order has been placed instead of a fortnight, call volumes have halved. Most customer enquiries fielded by Dell’s call centres are along the lines of “where is my machine?”, Kremer says.

Other changes to breathe life into Dell sales include brand advertising for the first time. Dell executives and PR representatives accustomed to direct marketing material only showed off US-made TV commercials demonstrating Dell’s just-in-time model and the flexibility it brings for customers. However, no local brand advertising will be produced.

No new products were announced during Michael Dell’s visit, but company executives cautiously pointed to Dell dipping its toes into high-value waters through better industrial design of systems aimed at gamers and Media Centre customers. Servers aimed at high-density datacentres are also a focus.

Saarinen travelled to Sydney as a guest of Dell

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