About a month ago, something happened that I would never have thought possible. I was actually jonesing for a Dell
The object of my computer envy was one of the company's snazzy new colored notebook computers, the XPS M1330, billed on the site as the "world's thinnest 13.3 notebook." The rotating Web graphic that makes that claim also aims to bump the XPS up toward the fashion-conscious audience usually dominated by Apple
An article in today's Wall Street Journal details the problems Dell has been having in actually shipping these snazzy-looking devices to the buyers who want them. There are problems with dust in the paint jobs -- problems, management says, that weren't apparent at lower-volume production runs. But it gets worse. There aren't enough of the LED monitor backlights, used in the thinnest, lightest models in the line, to supply the demand.
It's impossible for me to imagine Apple, for instance, having similar problems, or at least experiencing them right out in public. (Scarcity can be great PR, if you make it look the problem is too much demand, rather than an inability to supply. The PR folks at Dell could learn a few things from Cupertino.)
My colleague Tim Beyers has mocked Dell, saying that improving the supply chain (something that, in the past, before everyone else copied it, made Dell both insanely profitable and world-famous) wasn't enough to rescue the brand. He may be right on that, but irony of ironies, it looks like improvements in the supply chain couldn't hurt about now.
That's because Dell's also having trouble delivering products from its Inspiron and Vostro lines. There's an apology on the Dell blog, but to judge by some of the hostile reactions, it hasn't mollified everyone. Angry potential customers claim their orders have been "in process" for weeks, even months. One fan of Hewlett-Packard
And so it goes when you try to concentrate on the consumer, then fail to deliver. The Internet allows people to share their rage with anyone, instantly, and then guys like me come along and spread the word. How much damage will this really do to the firm's reputation? Hard to say.
It also remains to be seen if its new/old focus on the customer can actually pull the company out of its nosedive. Shorter-term, shareholders need to wonder if Dell's inability to move product will come back to bite it in the assets next quarter. Will revenue take a hit? What about margins?
It's been a very bumpy ride so far. Michael Dell's piloting skills had better be top-notch.
Dell is a Stock Advisor and an Inside Value pick. All of our newsletters offer 30-day free trials.
At the time of publication, Seth Jayson, a top-10 CAPS player, had no shares of any company mentioned. See his latest CAPS blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.