• The Mac Hardware Report: Michael Dell Changes His Tune

    June 18th, 2005

    To some, Michael Dell is the marketing genius who made PCs commodity products and built the number one personal computer maker. To others, he can sometimes be a loose cannon who makes wild statements, such as the one, some years back, that Apple Computer ought to just close up shop and pay off its investors.

    Now comes his latest headline grabber, that “If Apple decides to open the Mac OS to others, we would be happy to offer it to our customers.” It was the shot heard round the world, or maybe Dell felt Apple was getting all the good press, and he wanted to bask in the glory. Stranger things have happened, and it was equally strange that Dell dropped this wrecking ball in an email to a columnist from Fortune magazine.

    So what’s Dell really thinking? That’s a good question, and maybe it’s not just that he might be jealous of Steve Jobs. But that’s always a possibility, since Jobs gets far more publicity than one might expect from a company that occupies just a tiny portion of its market. Dell must be feeling a little neglected. His company is a major financial success, an unstoppable juggernaut in the PC box industry, but how often do pundits talk about him, or his company’s products, aside from the quarterly financials? When has Dell produced a product so compelling as to dominate the attention of technology pundits? The answer is, of course, never, since Dell isn’t in the business of amazing us. It just wants to sell product, period.

    It may surprise some of you to know that Dell has, in the past, actually done business with Apple. For a brief period of time, before it came out with its own failed line of so-called “iPod killers,” Dell actually sold the iPod. Yes, the genuine article, long before HP got into the act, and it happened with little fanfare. One day, visitors to Dell’s online store discovered that the iPod was listed, and then it was gone.

    So clearly someone at Dell has talked with Apple, and if Michael Dell says he’d be willing to put Mac OS X on some of his computers, maybe he’s doing more than just putting a public face on private hopes and dreams. You see, among all the PC box makers, Dell is big enough to stand up to Microsoft and not fear the consequences. It already sells Linux and not another warmed over Microsoft OS on some of its servers, and maybe therein lies the clue. I mean, how many sales could Apple possibly lose if it did make a deal with Dell?

    If Mac OS X came in a cheap Dell box, the answer is plenty. As I have said on a number of occasions, if Apple dared to agree to such a deal, it would quickly gut its own hardware sales. Sure, some folks would still prefer Apple’s cutting age designs. But Dell would, like Power Computing during the failed era of Mac OS clones a decade ago, cannibalize sales of real Macs big time. Apple would be shooting itself in the foot to go that route.

    On the other hand, there is one product category where Apple might gain big time if it did a deal with Dell, and that’s servers. Sure, the Xserve is a great product, but its sales are downright miniscule. From a practical point of view, there’s not a whole lot to lose if the Xserve vanished, but imagine if Mac OS X Server became the primary operating system on a Dell server? Combine such a product with Dell’s marketing muscle, and you’d see an incredible amount of market penetration in businesses that have previously shunned Apple. Of course, the Xserve could stay in the product line, simply to give companies a second source of supply if that’s what’s required to get the deal.

    Such a deal could even be extended to HP, another big player in the server market.

    The results? Well, it would give newfound Apple Computer credibility. Could it possibly hurt Dell? In the scheme of things, Dell will still sell millions of cheap boxes, because the Mac will still be perceived as a premium product, one that will bust the budgets of tight-fisted corporate bean counters. But having Mac OS X appear on more and more servers will not just enhance Apple’s bottom line, but strike another shot at the bow of Microsoft.

    Until recently, we thought of Intel as the great enemy, part of the infamous Wintel alliance. Now Intel is our friend, and maybe, some day, Dell will be our friend too. Imagine Steve Jobs and Michael Dell embracing at a future Macworld Expo. Stranger things have happened, and maybe Dell is indeed crazy like a fox.

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