What Went Wrong With Dell Computer?

Toronto Globe and Mail reports:

Despite the advantage of almost instant market feedback through its direct-sales model, Dell executives have made uncharacteristic, critical errors that have sent the stock down 46 percent and caused it to lose market share to archrival Hewlett-Packard Co.

"We believe we understand the things that have happened that caused that to occur and we've taken a number of steps to address those," Dell, the company's chairman, finally responds. "I'm not going to give you the dirty laundry about that."

Other executives are a little less reluctant to reach into the hamper. They offer more details of what's gone wrong. Kevin Rollins, chief executive officer since 2004, admits that he and his team have recently made mistakes. They underestimated competitors, failed to see trends in market data, and let customer service slip. "Why would Dell, the perfect company, ever have a mistake? We did. Right now we're not dwelling on that. We're going to dwell on what we're doing to fix it," he says.

The repair list includes removing $3 billion of costs this year from an already lean machine, pouring resources into customer care, pushing further into overseas markets and jazzing up Dell's traditional black-box designs.

But some analysts and investors think the problems run deeper. They believe Dell is selling to an increasingly saturated market and, even more disturbing, that it's renowned direct-sales model has lost much of its advantage.

The computer market is in flux.Dell has always bragged about customers choosing what they want in a computer.But,you can't pick what brand of hardrive you want or what brand of motherboard you want at Dell.Something to think about.