Dell remains a success story of the early Information Age. The innovative company disrupted the entire nascent PC market and gave consumers better choices, flexibility and pricing.
Then it got awfully big. Revenue continues growing, yet operating income is decreasing. That is called a shrinking margin, and investors hate that. Share in the company's stock hit 30 four years ago and kept climbing. The slide began in 2005 with increased competition and decreased customer satisfaction. Just a year ago, the stock slid under 20 for the first time in years. The board and Michael Dell himself have struggled to bring margins back to the healthy range where where investors will reward them.
But Consumer Help Web's team has noticed that Dell machines are more fragile than ever before. We're seeing a useful life on the budget model Inspiron of only one year. Integrated video on the motherboard caused one to be useless. Meanwhile, keys and displays are going bad on two others. In fact the latest model (an Inspiron 1501) had the keyboard replaced in August, and the DVD drive replaced in September. What happens when it is out of warranty in two months?
According to a transcript we have of a Dell support technician, the company's representatives are not even allowed to refer to a laptop by its colloquial name. Instead, they're to refer to the machines as "notebook computers" so that no one gets hurt or burned by putting the machine in their lap. The same rep said to us in chat mode that complaints were up because the company was using "cheaper parts". We didn't prompt her, but she knew who we were.
This should not come as news to subscribers. In 2003, web media giant CNet reported on Dell's unsatisfactory ratings among business customers. ComputerWorld reported the same results for consumers one year later. Topping things off was the never-shy Forbes, which called Dell's satisfaction ratings a "deep dive"and predicted the stock slide that occurred.
Will the company recover?
Consumer Help Web received a satisfaction survey. We left strident comments and rated the entire process as a "1" on a scale of 10. We also invited Dell to contact us to try win us back from Lenovo and Apple. We'll let you know if that ever happens. Meanwhile, caveat emptor. These are rough days for Dell, and consumers ultimately pay the price.
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