Dell, The Innovator?
By Edward F. Moltzen
 Flashback: It's August 2006. Dell is a direct-only company, it's suffering from the bad publicity of having one of its notebooks blow up at a conference in Japan and its market share is on the verge of a big decline as companies including Hewlett-Packard and Acer are taking away business.
Specifically, in 2006 Dell found itself losing significant share in notebooks—the hottest growth area in the industry.
After a senior management shakeup, a turn to reseller and retail channels to grow sales and a new emphasis on quality control and innovation, guess what?
According to research firm Displaysearch, Dell grew its worldwide notebook market share last quarter to 15.1 percent. It climbed over Acer to regain the No. 2 position (behind HP) and it grew its worldwide notebook shipments 45 percent on a year-over-year basis. Dell grew its notebook sales at a stronger clip than anyone else besides Lenovo. (Lenovo grew notebook sales 58 percent, year-over-year, and owned half the market share of Dell.)
Dell's lousy performance in notebooks in 2006 provided the first glimpse into something going wrong at the Round Rock. Now, six months after launching its first, formal, broad-based channel program and working to innovate its notebook lineup, this may very well be the first glimpse into something going right.
Some might chuckle at the idea of Dell as an innovator, after it wore the reputation for many years of winning business simply on price. But when you consider that Dell was the first company to preload modern Linux onto desktops and notebooks when other OEMs sat on the sidelines; that it was the first tier-one PC maker to dive head-first into Web 2.0 with its IdeaStorm Web site; and that it's no longer the last to embrace alternative technology (like it was with AMD processors), you begin to see that it's not the same Dell that hacked and slashed its way to the top in the 1990s.
One bad quarter—or a couple of weeks of panic in Round Rock if the numbers start to fall short—could undo a lot of progress, so let's not get carried away. If the numbers were lousy for Dell, you can bet we'd be writing about it. Now that it's showing signs of life, it bears pointing out as well.
Displaysearch does note that Acer could just as easily turn up the heat, get aggressive and take back the No. 2 spot in the near term. But in an increasingly competitive slice of the market, Dell now at least has some channel partners that it can take into battle.
What do you think of Dell's channel efforts? |