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Is Dell's Death Spiral Speeding Up?

Dell has crashed hard over the last few years, and with slowing PC growth this year, the trend doesn't appear to be slowing. The company's made-to-order model was very successful for its time and allowed Dell to run a lean inventory while they used their massive size to delay payments to suppliers and bring in money from sales at a faster clip. That window is narrowing, though, as Dell has lost clout and its days sales outstanding has grown 60% from a few years ago. That coupled with weaker sales means money is coming in slower -- and lighter -- than before. 

While the company may resemble a great value play, its between a rock and a hard place.

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Austin Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Oracle and has the following options: short JAN 2013 $150.00 calls on and long JAN 2013 $150.00 puts on Motley Fool newsletter services recommend Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On September 15, 2012, at 9:16 AM, CMFSoloFool wrote:

    Dell is losing because they've stopped making great products. I last 5 laptops have been Dell, and with each edition they get a little worse. Now I'm writing this on my Dell XPS ultrabook, and it is perhaps the worst laptop I have ever owned. Just before writing this I had to reboot it because the screen was flickering out of control. If you look at the keyboard layout on this slick looking ultrabook, you will soon discover that Dell has lost their mind. It now takes 2 hands and two key strokes to get to some very commonly used features, like page down/up, home, end, and volume. Their new track pad is devoid of buttons, you have to push on the track pad to make a click, but you have no sensory feedback to guide you and let you know if you are right or left clicking, so you often get a right click instead of a left click. But worse, when you consciously position your finger on the lower left corner for a left click, the track pad itself often gets confused and gives you a right click anyway. Also, take a look at the size of the track pad in relation to the size of the keyboard and you will see that no ordinary human being can effectively type without their palms protruding over the track pad, sending your mouse pointer into oblivion when you are in the middle of typing.

    Plain and simply, Dell is lost. I could go on about several other shortfalls, but hopefully by now you get the picture. Dell should have real human testers who use computers for business and useful things like creating content, instead of monkeys who just surf the web all day.

    Mr. Dell, I hope you never have to use one of our XPS ultrabooks in the real world, cause if you did you would likely throw it out the window. Please, for the sake of your once great company, fire your design team and take some cues from Apple or somebody who knows how to design computers people want to use.

    On the up side though, the new XPS ultrabook is one heck of a sharp looking, slim, light computer, very reminiscent of the Macbook Air, it just isn't functionally meant for humans with hands.

  • Report this Comment On September 16, 2012, at 9:40 PM, jhf678 wrote:

    Dell computer is so reliable that is why it kill them. People and I don't upgrade because of it. Mort Chinese computer break in a short period time. Dell is more into service right now.

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