Michael Dell: Apple Has Priced Itself Out Of The Market

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Long time Apple watchers will likely know that there has long been a weird sort of rivalry between Apple and Dell, and indeed between their head honchos. Michael Dell once said that the best thing that could be done with Apple would be to shut it down, liquidate its assets, and return the money to its shareholders. Steve Jobs responded a bit later by showing an image of Michael Dell with cross hairs over his face, saying that Apple was going after Dell (we should note that this obviously resulted in little).

Both of those events happened years ago, but since that time, a Dell exec criticized Appleis education efforts, Steve Jobs slammed a Dell notebook during the white iBookis introduction, Mr. Dell responded by saying that his favorite thing from Steve Jobs was Toy Story 2, and Steve Jobs eventually made the observation that Dellis PCs were the Ford Taurusi of the PC industry. Apple also criticized Dellis entry into the MP3 market as being unoriginal.

In other words, there is no love lost between these two companies. Thus, it shouldnit come as much of a surprise that Mr. Dell has come out swinging again, this time saying that Apple has priced itself out of the market. The comments came in an interview with CNBCis Ron Insana that was published by USA Today. From that interview.

Insana: Getting back to your bread and butter, who is your major competitor in PCs?

Dell: Itis many of the same companies from the past. Maybe a few of them arenit as strong as they used to be. Last quarter, our unit growth in notebooks was 40%. In desktops, it was 21%. We gained share in every region of the world. In the U.S. our share is greater than the next several companies combined. Youill note, as well, that weire kind of the only company in the industry that actually makes a profit.

Insana: What about the resurgence of Apple (AAPL)? Steve Jobs says he sells the Mercedes of the computer business while you sell the Taurus.

Dell: If you go look at where jet engines are designed, for example, you might be curious to note that more than half are designed on Dell computers. What Apple has done is build the Bang & Olufsen of the computer industry -- very nice products, but theyive priced themselves out of the mainstream market.

Note that Mr. Dell also claimed that Dell is "kind of the only company in the industry that actually makes a profit," a claim that is untrue. Apple also turns a profit from PC operations, though not as consistently as Dell. HP also turns a profit, but its PC division loses money, while its services and printing businesses make money hand over fist. Then again, this misperception about Dell being the only profitable PC company has persisted for years.

This isnit the first such blatant mistake that Mr. Dell has made in an interview. He made another incorrect claim a few years ago by bragging that Dell was the first PC company to integrate 802.11b support into its portable line. Dell did so 13 months after Apple had done so.

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