Michael Dell declines to eat his Apple (humble) pie

On the day Apple releases its quarterly results, which are broadly expected to make it the most valuable company the world, Michael Dell attempted to explain his infamous comment that Apple should be shut down and sold off. In 1997, Dell was speaking at a Gartner symposium and was asked what advice he would give to the new …

[Dave Wray]

He was right!

In 1997, Apple didn't have the Ipod, the Iphone or the Ianything worth having. They had Ifuckall apart from a loss making company selling obscure devices in graphics and eduction.

Michael Dell was right. Apple's fortune was completely out of the blue (not neccessarily luck, but not predictable either) or the share price wouldn't have risen 150% in the year following the first IPod.

Apple have done well, but the only logical decision looking at a 1997 balance sheet was pull the bleedin plug and fast.

[Goat Jam]

How Was He Right?

That would mean by definition that Steve Jobs was wrong to continue the company and invest in new products.

History tells us otherwise.

[Graham Dawson]

He was right, based on the information he had at the time. Subsequent information doesn't change that.

Steve Jobs took a risk and it paid off but it was a *big* risk. The sort of risk that either makes you a billionaire or leaves you wandering the streets in the tattered remains of your last suit. He was right too. They were both right, it just depends on how you look at it.

[Steve Evans]

@Goat Jam

Hindsight is 20-20.

In 1997 I don't think anyone could have predicted what Jobs could and would do with Apple, and I doubt anyone else would have managed it. It was "his baby" after all. He was a rather unique driving force, and we'll have to see what happens now he's gone.

In the parallel universe where 1997 saw the end of Apple, I don't think anyone will be casting any blame for not sticking with it. Jobs pulled off a 1000:1 shot.

[Michael H.F. Wilkinson]

@Steve Evans

"In the parallel universe where 1997 saw the end of Apple, I don't think anyone will be casting any blame for not sticking with it. Jobs pulled off a 1000:1 shot."

I think it was a million-to-one shot, and everybody knows you can always pull those off! Just ask Sergeant Colon

[John 62]

upvote for Pratchett ref

[Yag]

" How Was He Right?"

To put it another way...

Beside the logo, what is now left of the Apple of 1997?

Would it be different if, instead of going on with Apple, another company was created to market the iThingies?

However, the hypothesis of saying that just to force some journos to shut up is credible...

[Goat Jam]

OK

So, let me get this straight.

In the context of M Dell being a non-descript beige box shifter with little imagination and assuming that S Jobs had the same limited imagination as M Dell then in that scenario it would have been the right move to make.

OK, got it.

Except for the small fact that S Jobs apparently did have an imagination which then makes it a wrong move again.

[Graham Dawson]

Well now your'e just being obtuse.

[Anonymous Coward]

@Goat Jam

At the time, Apple produced boring beige boxes as well. The most interesting thing they produced - The Newton Pad - was axed by Jobs as soon as he returned to Apple.

[Tchou]

Dead wrong

Even the logo is not the same.

[cloudgazer]

@Yag

What is left of Apple 1997? Pre-merger with NeXT not much but the brand names, but Dell was speaking post the merger with NeXT - so the OS is what is left. An OS which powers their Mac line with revenues of $5Billion per quarter and probably profits that are over $1.5BN per quarter. A business which stood alone is doing better than Dell.

Also some of the people are left - Jony Ive was at Apple pre-NeXT, for example.

[ZagZee]

It is worth remembering

that Jobs sold all of the Apple shares that he acquired when he returned to Apple,as soon as he could.

He himself didn't even foresee the success he would eventually turn Apple into.

[Earl Jones Of Potatoes]

W*nker

what a w*nker he is.

[daiakuma]

Turns out, Apple's results for the quarter were disappointing.

[Anonymous Coward]

640K is enough

Nuff said

[frank 3]

'nuff never said

would be 'nuff said, had he ever said it. but he never did so what's your point exactly?

http://groups.google.com/group/alt.folklore.computers/msg/99ce4b0555bf35f4?pli=1

[Anonymous Coward]

He was right.

At the time, and looking at it from a bystanders point of view, he was bloody right. History, however is written by the conquerers, with only a few sad old men like myself remembering what it was like in those days.

The Dead Man from Cupertino had nicked Woz's money from Atari. Apple had a deal with several whitebox clone makers, and they were selling more than them. Sales were crap, but better than Apples. The Apple IIe was in the toilet. TDMFC was sent packing from Apple. The OS was buggy as hell. His animation company was in the doldrums too, as he was having a big row with Disney over Toy Story. NeXT was a financial headache, and Apple was looking at BeOS to replace it's ailing OS. If the guy from BeOS hadn't wanted silly money, the world would have looked quite different.

Then Toy Story exploded at the box office. The rest is history.

[Christian Berger]

So Jobs followed his advice then?

After all as a previous commenter pointed out, what's left of Apple?

They killed classic MacOS. (maybe a deserved death)

They killed the Mac itself selling only PCs with modified firmware.

They killed their tablet, the Newton.

They also killed their reputation of a company which sells reliable, but expensive hardware. Now it's unreliable and expensive.

[John I'm only dancing]

But

Steve Jobs knew what was going on inside Apple in 1997. He knew what was in development but not being taken seriously by the previous management, and killing the clones was the right thing to do. History tells us Jobs was right, Michael Dell was wrong. End of.

[Armando 123]

Hold on a second

Let's apply that logic to other companies.

What does MS still sell that they had in '97? Windows 95 is gone, Office has been updated many many times, etc etc etc. GM has dropped Saturn, Oldsmobile, and Pontiac, and all the other vehicles have been redesigned/replaced/updated. McDonald's is still making Grade E But Edible Burgers, but that's not an innovation-driven business.

If you take any company in a competitive business which involves engineering and innovation and design, then they have all changed a lot since '97.

[Alien8n]

Churchill

Back in 1941 Churchill was told the best thing Britain could do was surrender to Germany. This was based on the fact at the time we'd had our butts kicked back across the Channel and were losing everywhere we fought except in the air. At the time the USA was firmly entrenched in a neutral stance and we were staring down the barrel of defeat at the hands of Hitler. Instead Churchill told Hitler to sod off and and vowed to go down fighting. Luckily Japan scored an own goal by attacking Pearl Harbour which forced the USA into the war.

Still doesn't make the original advice wrong, but as in war and business, 6 months is a very long time.

[Gil Grissum]

Right at this moment, Dell is trading at $16.29 and Apple is trading at $401.41, so Michael Dell's claim that his company's stock has risen 16,000 percent since initial public offering is pretty weak compared to the rise in Apple stock since 1997 when Jobs returned. That's just basic simple math and nothing to do with fanboism. Numbers don't like and the numbers say that Dell should just eat his words and STFU.

[Nunyabiznes]

I haven't looked it up, but you need to consider some additional factors.

Stock splits, buy backs, actual shares in circulation etc. all have an effect on % change over the last ~14 years. So MDell might be right in a very construed manner.

However, Apple went from also-ran to most valuable while Dell went from so-so to so-so.

Spin is as spin does I suppose.

[Anonymous Coward]

@Gil

Yes, but that only works as a comparison if both companies have the same amount of shares and pay the same %age dividend.

Now Apple is valued more than Dell, but in the opinion of many in the financial services industry, Apple is very highly overvalued. Then there is the slight matter of the lack of Apple paying any dividend.

Now Apple are currently larger than Dell, granted, but I would rather put my money into Dell and get a dividend instead of having to just wait for the share price to move in my favour to cash in the stock.

[Ramazan]

why do both of the guys

hold half of their feet higher than their respective a$ses?