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Dell Owner Admits Rapid Rise of Tablets Surprised Him

By - Source: Wall Street Journal | B 19 comments

Michael Dell didn't expect to see businesses adopts tablets instead of PCs so quickly.

As his company goes private via a $24.4 billion deal, Dell founder Michael Dell has admitted that the rapid rise of tablets has surprised him.

The emergence of the tablet market is widely believed to have been the cause of the PC industry's market decline. "I didn't completely see that coming," Dell said, adding that he did not expect to see businesses ditch PCs in favor of adopting tablets in such a short period of time.

During October 2012, tablet display shipments surpassed that of notebooks. In 2013, global tablet shipments are expected to surpass notebooks by approximately 33 million units at over 240 million units.

Dell, meanwhile, was once the dominant force in the PC market. However, its fortunes have continuously declined with emerging technologies. In a bid to revive the company's performance in the market, it recently completed a $24.4 billion deal to take it private.

It was financed by current CEO and founder Michael Dell, private equity firm Silver Lake, and debt financing from a consortium of banks, while Microsoft contributed a $2 billion loan.

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Top Comments
  • 13 Hide
    boiler1990 , February 6, 2013 1:58 PM
    ingtar33the only reason he's buying his company back is to use it as his own personal piggy bank. he's been planning on doing this ever since he got in trouble with the SEC for doing just that a few years ago.


    The beauty of a privately-owned company is that they can do whatever they please rather than having to bend to the will of share-holders and a short-term-profit-hungry board of directors that make terrible business decisions. You know, like HP.
Other Comments
  • 6 Hide
    disolitude , February 6, 2013 1:11 PM
    In before some guy mentions his 1997 comment about Apple needing to shut down and giving money back to shareholders...
  • 0 Hide
    virtualban , February 6, 2013 1:24 PM
    Portability, with the added benefit to consume media laying back at the couch, at the living room, at the toilette, and, when waterproof, in the shower too.
  • Display all 19 comments.
  • 13 Hide
    boiler1990 , February 6, 2013 1:58 PM
    ingtar33the only reason he's buying his company back is to use it as his own personal piggy bank. he's been planning on doing this ever since he got in trouble with the SEC for doing just that a few years ago.


    The beauty of a privately-owned company is that they can do whatever they please rather than having to bend to the will of share-holders and a short-term-profit-hungry board of directors that make terrible business decisions. You know, like HP.
  • 8 Hide
    twelve25 , February 6, 2013 2:02 PM
    Agreed. Private companies seem to be the only ones making smart decisions these days. Many of the big public companies have to concentrate only on next quarter's earnings, even if it means running the company into the ground 5 years down the road. Shareholders are not patient anymore.
  • -4 Hide
    InvalidError , February 6, 2013 2:07 PM
    2012 was a great year for smartphone and tablet adoption but I think 2013 models are going to mark a major leap in productivity on those devices - they finally got enough RAM and processing power to start going significantly beyond simple media consumption.

    So people who were surprised by tablet sales in 2012 have not seen anything yet... 2012 was just the tip of the iceberg showing up on radar.
  • 5 Hide
    dgingeri , February 6, 2013 2:10 PM
    boiler1990The beauty of a privately-owned company is that they can do whatever they please rather than having to bend to the will of share-holders and a short-term-profit-hungry board of directors that make terrible business decisions. You know, like HP.


    Amen to that. I'm in a cash strapped corporation right now. Instead of giving us the budget to buy the equipment we need to make products that can compete, we have to scrounge for OM1 fibre cables, use 10 year old servers and storage arrays, and produce products that are 2 years behind our competitors. All so they can give the shareholders more dividends while we wait around for some bigger company to buy us out for our old patents. Utterly stupid.
  • -1 Hide
    fnh , February 6, 2013 2:22 PM
    dgingeri... All so they can give the shareholders more dividends ...


    Hello Dutch East India Company!
  • 3 Hide
    Tekkaman , February 6, 2013 2:46 PM
    "businesses adopts"

    My favorite.

    @dgingeri - Really sorry to hear. It's sad that you are in such a situation. Best of luck to you. I've seen that and it is becoming more commonplace than previous. It should never be that way.
  • 3 Hide
    chibiwings , February 6, 2013 2:47 PM
    I'm one of those guys that will grow old using a mouse and keyboard..
  • 1 Hide
    whiteodian , February 6, 2013 2:48 PM
    This is not surprising to me at all. Desktops and Laptops are not going anywhere for a while though. They are still a vital part of most businesses. As far as for personal use, it depends on if the person wants to be productive or not. If they do, then they get a laptop or PC. If they just want to consume media, then get a tablet or if they have the money, both.
  • 1 Hide
    ajrm , February 6, 2013 2:55 PM
    Watch this space... Someone like michael dell never does something without a SOLID reason .. expect Dell to come up with quality tablets in a few years
  • 0 Hide
    tntom , February 6, 2013 3:17 PM
    I see old people carrying around their iPads everywhere. I would have never thought someone would buy a $499 tablet over a $299 netbook with the same size screen. I was at a public convention and there was a husband and wife both in their 70's taking notes by pecking at their iPad screen.
  • -1 Hide
    apone , February 6, 2013 3:43 PM
    I call BS on Michael Dell's statement. Considering the sheer size of Dell, I'm pretty sure there was at least one crack squad group of employees at Dell whose only job was to do market research, crunch numbers, and basically monitor the industry to eventually reach the conclusion that tablets would make a splash. I reckon said team probably brought it to Mr. Dell's attention and he dismissed their findings as being ridiculous or not significant enough to convince him to shift company resources (ahem, solid R&D) to capitalize on such a lucrative trend.
  • 0 Hide
    robochump , February 6, 2013 4:01 PM
    virtualbanPortability, with the added benefit to consume media laying back at the couch, at the living room, at the toilette, and, when waterproof, in the shower too.


    Yes, Tablets only work now and not years ago due to faster internet, social media, and App market modeled after Apple. Years ago tablets failed because the internet was slow and was very limited in its usefulness. Today I can do a large portion of what I do on my PC with my iPad. Dell like many companies lack vision and only rely on bread and butter sales within a proven market.
  • -1 Hide
    tomaz99 , February 6, 2013 4:17 PM
    chibiwingsI'm one of those guys that will grow old using a mouse and keyboard..



    Mouse? Strictly TEXT display here...
  • -1 Hide
    tomaz99 , February 6, 2013 4:23 PM
    tntomI see old people carrying around their iPads everywhere. I would have never thought someone would buy a $499 tablet over a $299 netbook with the same size screen. I was at a public convention and there was a husband and wife both in their 70's taking notes by pecking at their iPad screen.


    Other than taking notes...I think older people like tablets because of the intuitive interface.
    Tap the item you want...and it works...

    When you put an older person in front of a PC (or laptop) with a mouse and keyboard they spend most of the time staring at either. All those buttons...what if i hit the wrong one? Do i click once or twice? Do I have to hit enter?

    Ever see an older person learning to double click? Heh...a nice slow double click with mouse movement...they end up dragging and dropping (into the trash, another folder...) the item.
  • 7 Hide
    Solandri , February 6, 2013 7:22 PM
    1) The cause of the PC's decline isn't tablets. The vast majority of tablet owners I know also own a PC. The cause of the decline is longevity. Gone are the days where you had to upgrade your PC at least every 3 years or it wouldn't be able to run the latest software. Today a 5-7 year old PC (core 2 duo) can run the latest software (minus games) just fine. If people upgrade half as frequently, the annual sales of PCs drops to half. Simple as that.

    2) The rise of tablets caught him by surprise because most tech geeks have been in denial about the low-end consumption-only market. You first saw it with netbooks, which the technocrati constantly criticized, made fun of, and dismissed. Most of the reveled when netbook sales began to decline, citing it as proof that they were right all along (while ignoring the tablet sales which took their place).

    News flash: Tech geeks comprise only about 5% of the population. The other 95% doesn't care how many GHz your CPU runs at, how many cores it has, nor how many FPS you can get in Skyrim. They just want something which lets them browse the web and read their email, maybe occasionally play a movie or some music. If you make something which appeals to that 95%, you only need to exert 1/20th the effort before your sales will match what you'd get selling something which appeals to the 5% who are tech geeks. Apple understands this perfectly, which is why they load up their products with frivolous "fashion" features that tech geeks dismiss. A glass back, a minimalist appearance, svelte tapering at the edges to make it look thinner. These mean nothing to the tech geek, but the masses absolutely love it. And they make gobs of money doing it because those masses are 95% of the population.
  • 0 Hide
    InvalidError , February 6, 2013 10:26 PM
    SolandriNews flash: Tech geeks comprise only about 5% of the population. The other 95% doesn't care how many GHz your CPU runs at, how many cores it has, nor how many FPS you can get in Skyrim.

    I'm surprised your comment hasn't been modded into oblivion like mine usually are when I try to remind people that most people do not need an i5 or even an i3. Core2Duo E8xxx can still run most modern games reasonably well, just not the more extreme titles.

    The new generation of tablets and smartphones is powerful enough to handle most of these people's everyday needs, just need the actual software those people want to run on their preferred platform(s) and hook up a keyboard, mouse, external storage and external display if necessary.