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View Full Version : Dell tops Apple in R&D


MacBytes
Nov 21, 2003, 11:22 AM
Category: News and Press Releases
Link: Dell tops Apple in R&D (http://www.macminute.com/2003/11/21/dell)

Posted on MacBytes.com (http://www.macbytes.com)

Approved by arn

1macker1
Nov 21, 2003, 11:43 AM
Well to tell you the truth, no one is burning up the R&D area. Most companies are taking ideas and products that's already out there, and trying to make it better(apple) or cheaper(dell).

mainstreetmark
Nov 21, 2003, 12:46 PM
Why don't they innovate that stupid "Interns" ad campaign off the air.

rjwill246
Nov 21, 2003, 12:48 PM
What a stupid headline. It's comparing Apples and Oranges... what are the percentages spent on R&D?

g808
Nov 21, 2003, 12:54 PM
What a stupid headline. It's comparing Apples and Oranges... what are the percentages spent on R&D?

Not sure, but you can see what Michael Dell has to say in this article (http://news.com.com/2008-1001-5110303.html?tag=nefd_lede)

Are you beefing up R&D to make your consumer products more unique, or is it more the case of using your distribution muscle?
We have 3,600 folks in our R&D division and spend half a billion dollars a year, similar to the amount Apple spends. We don't think percentage of revenue is a good measure of success in R&D. We look at it as--what do we need to spend to accomplish what we need to accomplish?

What have you done specifically on the R&D side that you're proud of?
We've made products easier to use and service. We've innovated in time-to-market. Who had the first color notebook powered by batteries? It's Dell. There's this misnomer that companies that spend more on R&D are somehow better and more successful, but there isn't a lot of data to support that.

If you look at innovation, it doesn't just occur in the lab. Comdex is the place you go to show things that nobody knows what to do with, because they haven't found a market yet. We don't develop things nobody knows what to do with. We develop things people want to buy--and buy in volume. Innovation can occur in supply chain and logistics, manufacturing and distribution, and sales and service. We've made computing products far more affordable. If you look at the cost of computers 20 years ago versus now, we've caused the whole industry to get more efficient.

machinehien
Nov 21, 2003, 12:56 PM
There's this misnomer that companies that spend more on R&D are somehow better and more successful, but there isn't a lot of data to support that.


Misnomer? I think Dell's use of the word qualifies as a misnomer.

Ambrose Chapel
Nov 21, 2003, 01:01 PM
but there isn't a lot of data to support that.

data should be plural! "aren't a lot of data"

Rower_CPU
Nov 21, 2003, 01:04 PM
Originally posted by Ambrose Chapel
data should be plural! "aren't a lot of data"

How many people actually pluralize data in American English? It's a common usage issue.

Back on topic, I too would be interested in seeing R&D spending as a percentage of overall revenue, as rjwill pointed out.

Mr. Anderson
Nov 21, 2003, 01:09 PM
Ok, now lets look at what they're actually producing.....Dell? Nothing industry changing in terms of R&D....Apple? iPod, iMacs, ITMS, eMac, iBook, PowerBook, FCP, just to name a few....

Apple's R&D *has* changed the industry - so for all the people on Dell's R&D programs and all the money they're spending it doesn't seem as though they're producing all that much.

Again, I think for Dell, they're just happy to be comparing themselves to Apple ;)

D

radhak
Nov 21, 2003, 01:55 PM
actually, he is distancing himself from the 'innovation in design' aspect, and is happy to be innovative in 'supply chain and logistics, manufacturing and distribution, and sales and service.' and he might have something there.

Dell's handle on the logistics of customer-order-to-delivery is the smoothest in today's personal computer world. they were definitely innovative in the whole concept of direct-to-customer (cutting out the retailer), and even when others got onto that, they have an easy lead. their business plan defies loss in the market place due to (say) technological break-through or the collapse of any particular vendor (they don't hold any inventory worth the name, and they are not very particular or loyal to parts vendors), so they are forever pulling down the lower-end of prices. while the past couple of years have seen a drop in their customer satisfaction levels, at the volumes they operate, they are still better off than anybody else.

in all this, there is still no way to compare Dell and Apple - they operate in different spheres. the market loyalty of Apple users is not something Dell has, but that has to do more with the product than the company, and he is clearly okay with that.

when Apple made a paradigm shift when it moved from OS9 to OSX, it led its customers in a path it unilaterally laid down (the fact that it was a great move helped, of course). on the other hand, Dell is very happy catering to the Linux movement away from Windows as long as they can retain their hold on the market share. as he says, he'd rather be pragmatic than revolutionary.

phc
Nov 21, 2003, 02:03 PM
Originally posted by radhak
actually, he is distancing himself from the 'innovation in design' aspect, and is happy to be innovative in 'supply chain and logistics, manufacturing and distribution, and sales and service.' and he might have something there.


Good point... they could do so much better if they just geared some of that innovation toward their products.

Mr.Hey
Nov 21, 2003, 03:33 PM
me too, me too damn it!!!

machinehien
Nov 21, 2003, 04:01 PM
Originally posted by radhak
actually, he is distancing himself from the 'innovation in design' aspect, and is happy to be innovative in 'supply chain and logistics, manufacturing and distribution, and sales and service.' and he might have something there.


Yeah, what Dell lacks in technological or design innovation, he also lacks in mistakes, he's able to capitalize on everyone else to make them for him. Believe me, if the iPod or iTMS had been a commercial failure for Apple, there would be no Dell DJ or matching music service and Dell wouldn't hesitate in taking potshots at it.

I guess that goes to show that his axiom "Don't do anything stupid" is a very sound strategy for market dominance.

Ambrose Chapel
Nov 21, 2003, 04:20 PM
Originally posted by Rower_CPU
Back on topic, I too would be interested in seeing R&D spending as a percentage of overall revenue, as rjwill pointed out.

it must be lower than apple's..dell says that they spend "similar to the amount Apple spends." according to yahoo's finance page, dell's revenue was 35.40 billion, while apple's was 5.74 (if i'm reading the right numbers).

radhak
Nov 21, 2003, 05:14 PM
Originally posted by Ambrose Chapel
it must be lower than apple's..dell says that they spend "similar to the amount Apple spends." according to yahoo's finance page, dell's revenue was 35.40 billion, while apple's was 5.74 (if i'm reading the right numbers).

you are. both spent around half-a-billion on R&D, so while it is almost 9% for Apple, it is only 1.5% for Dell (of their revenue). Michael Dell was defensive (as he shd be) about this in the interview because his company has always been accused of doing badly there (like machinehien points out above). Apple is known to spend a lot in R&D, which is the reason the comparison was raised during the interview, i guess.

9% is a respectably high figure, i think only R&D firms (like pharmaceuticals) would go higher than that, as would Intel and IBM, thru the nature of their business (semi-conductors).

Intel spends around 4 billion annually on R&D on turnover of around 32 billion, making it around 13%, which is huge. but then, if they don't do that they die, which may not be the case with apple (at least, not in the same scale).

but dell has made an art of enjoying the fruits of others labor; or as he has said, 'being innovative in the supply chain,... etc'

still, i have to admit, nothing wrong in that. that's the nature of his business, and he has excelled in it.

edit : all these figures are from memory, so could be a bit dated

TomSmithMacEd
Nov 21, 2003, 09:18 PM
Yeah, whoever spends more on R&D doesn't mean anything. It is what comes out of the R&D. If all you can do is put a black coat and a dell symbol on a lexmark all-in-one printer after puting 500million in R&D I say get some new reasearchers.

Photorun
Nov 21, 2003, 11:37 PM
Well actually Michael "soulless" Dell was adding in Apple's R&D staff to his figures, that's how arrived at his numbers. After all Dull doesn't actually create or come up with anything, you know, NEW! They tend to take all their cues from Apple, 'cept their stuff is cheaply made by slave labor and is basically ****.

[mod. edit - Don't circumvent the profanity filter.]

punter
Nov 24, 2003, 01:55 AM
What have you done specifically on the R&D side that you're proud of?

... Who had the first color notebook powered by batteries? It's Dell.

Hahah your R&D claim to fame is product that's been out years ago.