Sell Dell, and not just because it rhymes. That's the summary of some advise my brother gave me this afternoon.
A few months ago, he configured his ideal laptop on the Belgian Dell website. Today, he tried the same and noticed that Dell was clearly in violation of Moore's law.
There are two types of Dell notebooks, the Inspiron - Dell's normal laptop - and the XPS series - extreme notebooks for people who should actually buy desktops.
The CPU my bro' configured for his Inspiron a few months ago ((T7500, 2.2ghz, 4mb cache), is now only available for the XPS series, making it about €350 more expensive.
The standard configuration got a nice downgrade too as the clock speed went from 2 GHz to 1.66 GHz and the Li-ion battery lost 2 cells from 6 to 4.
There's more, but you'll have to ask my brother.
All this could indicate that Dell is in trouble, so our advice is to Sell Dell, or go short. On the other hand, this could be an attempt to increase profits and please stock holders. In that case our advice is to Buy Dell.
Disclaimer: Just as in Poker, you are responsible for what you do with your money. The difference is that in Poker, on average, people lose money, while on the stock market, on average, people win money (except the last few weeks).
Tuesday, January 29, 2008
Sell Dell
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4 comments:
Well, you've got a couple of things wrong there, my friend ;)
First of all, Moore law says nothing about "speed". It's about transistors on one chip. You could have a chip that runs at 1Hz with more transistors than your average quad core. This you could have known if you'd read the first line of the wikipedia article about it you link to ;)
(Example: when the industry switched to dual core processors, the raw Mhz count per core tumbled from 4Ghz to (2x)2Ghz, even though the total transistor count stayed relatively the same. This is way Moore's law hasn't been broken yet.)
Next, Dell is actively pursuing new markets at the moment by joining with supermarket cartels like Carrefour to put Dell PC's on display in their shops. A company in trouble wouldn't start with relatively risky operations like this if it were "in trouble" like you claim.
As you stated, the speed of your brother's processor hasn't disappeared. Dell has merely segmented the market to better profit from it and came up with the XPS line to do it with. Rest assured there are other differinces between the XPS laptop and your brother's, as in a better video card, which make up for the €350 in differince. Maybe they're fasing the old laptop out in favour of a new one to be launched soon?
Dell is a behemoth that doesn't "just get in trouble". If anything, it should be having a field day around now since CompUSA died and left a whole bunch of customers disoriented as to where to buy.
No offense intended :)
Thanks for your comment, David. No offense taken.
I am well aware that the switch to different architectures caused a drop in raw MHz count, but as also stated in afore mentioned Wikipedia article "an Intel colleague had factored in the increasing performance of transistors to conclude that integrated circuits would double in performance every 18 months." I merely coupled performance and speed. The drop from 2 GHz to 1.6 GHz was one within the same architecture, so this was in fact a drop in performance, or speed.
The cartels with supermarket chains like Carrefour could be why their standard model got a downgrade, because the supermarkets will want a piece of the cake and quite possible they will insist on discounts, which Dell will now be able to deliver.
The advice to sell Dell was just an eye catcher; Dell is probably doing very well. The other advice in the last paragraph is probably more correct.
Indeed, the XPS offers other advantages over the Inspiron, such as a bigger HD etc, but my brother doesn't need all this. And the fact remains that the standard Inspiron model was downgraded without a real price decrease.
I have nothing against Dell and have been a longtime fan of their marketing approach. But I must say I was a little disappointed when my brother told me about this recent behavior.
As long as you don't buy Acer ;-)
Looks like you might be right after all!
http://news.google.be/news?hl=nl&client=firefox-a&rls=com.ubuntu:en-US:official&hs=L9g&q=dell+&um=1&ie=UTF-8&sa=N&tab=wn
Dell is firing employees and has closed all it's kiosk stores (which could have something to do with it's new strategy of placing Dell's in supermarket stores, but it might have some other causes as well, of cousre).
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