Apple Gets No Respect: BusinessWeek Calls Dell The Only Profitable PC Company [Updated]

by , 12:00 PM EDT, August 23rd, 2001

[Update: Since publishing this story, BusinessWeek has updated their article to include a reference to Apple as being profitable last quarter. The paragraph we quoted below now reads:

If you listened to Dell Computer's second-quarter earnings announcement on Aug. 16, the company had plenty to be pleased about. The only PC manufacturer other than Apple Computer to make an operating profit in that sector last quarter, Dell clearly has a business model that thrives in a down market. In fact, the company has used the economic downturn as an opportunity to grab market share from competitors who aren't as cost-efficient. Small wonder it has emerged as the No. 1 desktop- and notebook-PC maker in the U.S.

Kudos to BusinessWeek for moving swiftly to correct the omission. Thanks to the many Observers who wrote us to let us know the article had been amended. We are leaving the original article below unedited for posterity's sake.]

This is not an article suggesting there is a big huge anti-Apple conspiracy in the mainstream press. Indeed, it is our opinion at The Mac Observer that much, but not all, of the bias that some mainstream outlets have shown Apple in the past is largely gone. However, Observer Chris Gray noticed a glaring sin of omission in an article about Dell in BusinessWeek. That article said that Dell was the only PC vendor to profit last quarter. Except for the minor detail that Apple also turned in a profit, that was more or less a fact. Chris sent the author of the BusinessWeek article, and CC'd The Mac Observer and other Mac publications. Chris's letter:

Does Dell Compute over the Long Haul?

In the above article you state:

"The only PC manufacturer to make a profit in that sector last quarter, Dell clearly has a business model that thrives in a down market."

This is not correct, if your definition of PC means personal computer. If you mean the only Wintel-based PC manufacturer, that means quite a different thing. Apple computer made a profit of $61 million last quarter.

Well said, Chris! This is the offending paragraph from the article itself:

If you listened to Dell Computer's second-quarter earnings announcement on Aug. 16, the company had plenty to be pleased about. The only PC manufacturer to make a profit in that sector last quarter, Dell clearly has a business model that thrives in a down market. In fact, the company has used the economic downturn as an opportunity to grab market share from competitors who aren't as cost-efficient. Small wonder it has emerged as the No. 1 desktop- and notebook-PC manufacturer in the U.S.

You can read the full article if you are interested. Except for the misstatement about Dell being the only profitable PC company last quarter, it is an interesting piece that calls into question Dell's business model.

The Mac Observer Spin:

We think that Dell has a massive case of myopia, with added symptoms of self-delusion, and has really hurt the industry and their own interests in their rush to turn the PC into a commodity. It was bound to happen eventually, especially with something that holds as little intrinsic value as a Wintel machine, but Dell has single-handedly hastened that process enormously. That will have an impact on Apple too, but Dell will not be immune to the consequences of its actions. As the article states, Dell's unit sales increased 19% last quarter, while seeing revenue growth of only 1%.

Congratulations, Dell! You have joined the ranks of Maytag. Be proud.

In the meanwhile, not including Apple as a profitable PC company was a silly mistake by the author of this piece, and does show that Apple still lacks the respect it has earned in the Wintel-oriented financial community. When all is said and done, Apple will be left standing among the ruins created by Dell's rush to cheapening the PC, but even then it will be likely that the company gets overlooked more often than not.

BusinessWeek Article