Dell holds back on promised MP3 player, and highlights key differences between Apple and Dell

Mon, Nov 10, 2008

Analysis, Finance, News

Last July, the Wall Street Journal reported that Dell was working on a new MP3 player that it was positioning to challenge the iPod.  The player was originally scheduled to be released in time for the holiday shopping season, but it turns out that Dell has pushed back its debut indeffinately.  This shouldn’t come as a surprise to anyone, and highlights the lack of vision that Dell has exhibited over the past few years.

The iPod debuted in 2001, and its reign at the top is over.  Sure sure, Apple still sells millions and millions of them, but the days of exponential MP3 player growth have passed.  Apple itself recognized this, and hence delivered the iPhone.  Dell’s plan to release an iPod killer in 2008 was doomed to fail because it was putting resources into a battle that had already been lost.

Rob Enderle wrote an article last August outlining a strategy to beat Apple.  Enderle, who was involved in Dell’s MP3 project, entirely misses the point.  Apple already won.  MP3 players are saturating the market, and with no foot in the door, it makes no sense for a company like Dell to enter an already mature market.  Dell made the mistake of looking at what was and is popular, instead of looking at what consumers might want in the future.  The next big battle, surprise surprise, seems to be smartphones.  Now, it might be easy to sit back and say, “Well, Dell doesn’t make phones, so of course it’s going to work on an MP3 player.”  To a certain extent that’s true, but at the same time, Apple didn’t make phones either – and that’s what separates a company like Apple from a company like Dell.  Innovation, taking risks, and taking an industry forward with new products is what it takes to be successful in today’s fast moving world of consumer electronics.  Coming out with an MP3 player in 2008 is the exact opposite of that.


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