Wednesday, July 7, 2010

Dell Hell - By the Numbers 15

Well, this one is going to be fun, I love doing the "By the Numbers" blogs because they give us a chance to quantify disaster. So let us jump in at the deep end... the deep end being in the cesspool of Round Rock Texas, corporate HQ of Dell and spiritual home of DellHell.

94 - Number of related news stories on Google News regarding Dells dirty dealings as pointed out over the last few days on this blog and many others. And those 94 sites actually have readers, unlike this one! They include PC WORLD, NY TIMES, CNN MONEY, NPR, THE GUARDIAN and a host of other mainstream news outlets... ENGADGET, a well respected tech magazine had my favorite headline of the bunch "Dell responds to latest capacitor-related fallout, ignores the whole lying to consumers part"

50,000 - A random figure representing readers per media outlet above. We have no way of estimating the actual readership of the articles so we are using 50,000 just for the mental exercise here. I mean we ARE talking the NY TIMES and PC WORLD...

4,700,000 - The estimated number of people who have read the articles about Dell delinquency using our figures above.

47,000 - Number of lost customers if only 1% of those people never buy another dell because of this bad publicity.

705,000 - Number of products lost if each person were to have purchased 15 items in their remaining lifetime.

70,500,000 - Dollars lost to dell from those customers.

Now lets have some real fun... remember we are just using figures from the top of my head and I am trying to be fair and simple.

470 - Number of execs with purchasing power at their company who are 1% of the lost customers above

1000 - Computers and accessories purchased every 5 years by each of the execs

2,820,000 - Product sales lost by dell during the career of these execs (30 years)

2,820,000,000 - Dollars of lost sales over 30 years because of this scandal

So we can see from even this simplistic exercise that Dell will take a VERY significant hit from this shoddy behavior, especially if one considers the $300 million in fines they are on target for, and remember that this behavior was encouraged by the top executives, perhaps a shareholder revolt is in order before the fire in the barn in Rim Rock becomes a 5 alarmer and burns down the whole place.

Tuesday, July 6, 2010

From Frying Pan to Fire or Liar, Liar, Pants on Fire?

Two blogs in two days... can only mean two things... Dell is at it again and I am bored.

Reaction to the news of the past few days re: dell shipping faulty computers and scamming customers with B.S. and a bit of smoke and mirrors, has brought out the spin doctors in full force.

Lionel (I have kids to feed) Menchaca and other spin doctors at Dell had this to say on the issue... "Dell did not knowingly ship faulty motherboards, and we worked directly with customers in situations where the issue occurred," and then stuck their collective foot even further into their mouth with this tidbit... "Dell suspended use of Nichicon capacitors after we discovered a problem in its manufacturing process,"

What Lionel fails to tell us is that Dell was aware of the problem in January of 2004 (rival HP stopped shipping computers with these capacitors in March 2004). Dell on the other hand continued to order these faulty capacitors from the supplier and sell computers with them installed until late 2005!! And in fact a review by Dell itself found "that OptiPlex computers affected by the bad capacitors were expected to cause problems up to 97 percent of the time over a three-year period".

In a final and hilarious twist to the story, the law firm defending Dell was itself affected by the computer failures and several emails to that effect are part of the court record! Dell even tried to B.S. their own lawyers!

So can we sum up by saying Dell has been lying to customers for years and continues to do so? Bill Snyder in PC World seems to think so, he had this to say... "Only a rotten company sells defective computers and lies about it." and threw this in as well... "it will always be tainted by the scandal and by its shocking breach of faith with customers" and signed off on the article with this..."Every now and then the company trots out a sincere-sounding exec to announce yet another initiative about improved quality and customer service. I don't believe them any more. This is how companies fade away and die."

So you tell me, is Dell full of good old Texas Bullshit? It would seem the executive offices in Round Rock are knee deep in it and rising at the moment.

Monday, July 5, 2010

Dell's Dirty Dealings and Plummeting Share Value

So after a brief hiatus while I spent some time at the Olympics and then relocated to a place best left unmentioned due to it's utter lack of charm or other redeeming qualities, I happened to google Dell news today and lo and behold, what do I find?

Here is a quote from Money.CNN

"From 2003 to 2005, Dell sold computers with faulty capacitors that allegedly caused most motherboards on two Dell Optiplex models to break, rendering the computers useless. Dell was aware of the issue, according to recently unsealed court documents from a pending lawsuit, yet continued to sell the computers anyway.

Though the juiciest details are still sealed by the court, several internal company e-mails show that Dell instructed its sales staff to downplay the malfunctions to customers.

"We need to avoid all language indicating the [mother]boards were bad or had 'issues,'" Jeff DilLullo, a Dell sales manager, wrote in a March 2004 e-mail.

One December 2004 e-mail shows that the company was hiding the reason for and severity of the crashes from its customers.


Hey Lionel Menchacha... if you are still working for these dirtbags I would love to hear from you... how do you spin this on Direct2Dell? (BTW Lionel, You can respond here, I don't follow Direct2Dell anymore, no point.)

Here is a quote for you Lionel, from one of your own bean counters at Dell and it says exactly what I was telling you was the reason you swines wouldn't fix my daughters computer even though you know darn well it was a turkey...

"we open ourselves up to a flood of customers wanting whole system replacements -- which would be disastrous."

Another quote from the same article indicates that this sort of behavior is not unusual at Dell...

"Dell recently set aside $100 million for a settlement it is negotiating with the Securities and Exchange Commission on a bundle of fraud charges stemming from years of accounting violations. An internal Dell investigation, completed in 2007, found that company officials improperly manipulated Dell's reserve accounts -- such as those set aside to cover product warranty claims -- to hide earnings shortfalls.

Not just A fraud charge... a BUNDLE of fraud charges... who would have guessed?

Spokesman David Frink, when asked about the issue of the faulty computers had this to say "old news."

Well maybe so, but did he notice in the last few weeks that Dell's share price has plummeted %26? It has been obvious for years that Dell no longer gives a damn about it's consumer customers, and PC sales to the consumer market have responded by dropping dell down the list of world leaders in PC sales year after year... but now with a bitter taste in their mouths resulting from fraud convictions and a very questionable set of customer service values, will Dell's corporate customers go the same way?

Let's hope so, Dell has earned it!