- A beaten and batteried Dell
- Pennies drop in telco land
Chip Hop and Algorhythms
This is like… you know… yeah, nerdy.
A beaten and batteried Dell
I saw a living legend earlier this week – well, not quite, but it was Michael Dell, the Original Box Shifter, or the man who turned the PC business on its ear with innovative sales and assembly techniques.
Seeing Dell in real life was kind of cool because you have to admire someone who’s managed to build up a US$60 billion empire selling low-margin products like PCs. He looked quite normal actually, without any discernible marks on him from rolling in it.
Despite the past success, Dell the company is currently in trouble. The huge battery recall apart, customers are becoming increasingly unhappy with Dell’s support and quality issues (wonder if the LCD monitor banding issue as been sorted out yet?).
Because the business Dell is in is low-margin, high-volume with frantic time-to-market cycles, it’s inevitable that at some point quality issues will occur. Dell’s far from alone in this respect. Even so, the problems are piling up for Dell, and Michael didn’t issue any clear signals on how to deal with them. Is US$100 million spent on improving customer service going to be enough when Dell’s OEMs are prone to making horrible gaffes like Sony with the batteries?
Michael Dell is betting heavily on Windows Vista, with its substantially increased hardware requirements over Windows XP, to take his company out of the doldrums. Why customers would pick Dell instead of competitors for their Vista boxes is not clear, however.
Recently, there have been calls for Michael Dell to get back into the saddle as chief executive, as industry pundits blame the company’s present predicament on Kevin Rollins’ leadership. Those calls will no doubt be more vociferous now that Dell (the company) reported a 51 per cent profit slide, and the US Securities and Exchange Commission (SEC) has launched an investigation into the PC maker’s revenue recognition and other accounting issues.
Pennies drop in telco land
After the Telecommunications Commissioner Douglas Webb’s disastrous one-eighty on local loop unbundling in 2003, we’re finally getting some idea of the kind of investment a competitive telco market place brings.
With the spectre of regulation hanging over them, our dominant telcos are talking deals with other providers like there’s no tomorrow. Vodafone seems to have improved its wholesale terms considerably, because now Compass, Orcon and M2 are keen on reselling mobile voice and data services some time in 2007. That’s encouraging, especially since Vodafone promises that the resellers will be able to compete on price. This wasn’t the case in the past when TelstraClear tried to resell GSM voice in New Zealand – the 029 network is still active, but the Smales Farm people aren’t marketing it. They might though, if Vodafone offers them improved terms.
I’m a little bit sceptical about the Vodafone deals, because they’re not the “Mobile Virtual Network Operator” ones that you see in other markets like Hong Kong. This means Vodafone’s resellers will have less freedom than MVNOs, which is of course a bad thing.
However, Vodafone’s willingness to create a wholesale market will probably go a long way to placate the regulator, if prices go down as a result. It also appears to have taken Telecom by surprise. The incumbent doesn’t even have mobile services in its blanket Wholesale Services Agreement, only fixed ones. Because Telecom can’t get handsets and data cards as easily as Vodafone, it’s probably quite hard for it to start wholesaling mobile services like Vodafone intends to.
Further money coming up: Seeby and the gang at Orcon have also been busy cosying up to global telco gear supplier Siemens. The result of that is a $30 million plan to build an ADSL2+ network over the next five years. It looks like the idea is to initially spend $14.1 million to reach 250,000 customers – that’s $56.40 each – who will get broadband access, Voice over IP and IPTV maybe next year already. This will be in the big population centres, presumably, as Orcon says smaller areas will be covered after that, with another $16 million investment.
This whole plan hangs on Telecom playing ball and providing access to the copper network for Siemens of course, but Theresa’s promised this will happen, and we all trust her, right?