Apple Death Knell #55 - Dell Says iPad Will Fail in Enterprise

Let me check my calendar. Hold on, it’s definitely 2011. For a moment, I thought it was 2001 or maybe even 1999. Why? Because a Dell executive is not only saying something that will embarrass and haunt him and his company for years to come, I actually get to make an addition to the Apple Death Knell Counter! Every time I think the ADKC is done, some idgit somewhere comes and saves the day.

Andy Lark on the iPadApple Death Knell #55 was uttered by one Andy Lark, Dell’s global head of marketing for large enterprises and public organizations (note that he’s not one of Dell’s chief corporate officers). In an interview with CIO magazine, Mr. Lark said that the iPad will fail in the enterprise market.

You know, the iPad, which is currently in use by 80% of the Fortune 100? Yeah, that’s the one; it’s going to fail in the enterprise space. This sort of prognostication is akin to Michael Dell saying that Apple should shut its doors, sell its assets, and give the money back to shareholders, or perhaps Michael Dell telling CNBC that “You don’t need stores to sell computers.”

I could list all manner of examples of Dell execs dismissing, criticizing, or otherwise insulting Apple, but this piece is about Mr. Lark’s claim that the iPad can’t hack it in enterprise, so let’s dig into that.

The marketing exec hinges his claim on two points. The first is that Apple costs too much and open is better and everyone knows that enterprise needs open and Apple is closed and closed sucks so we win.

OK, that’s a biased paraphrase, if you hadn’t already figured that out. What he actually said was, “Apple is great if you’ve got a lot of money and live on an island. It’s not so great if you have to exist in a diverse, open, connected enterprise; simple things become quite complex. [] We’ve taken a very considered approach to tablets, given that the vast majority of our business isn’t in the consumer space.”

Maybe my paraphrase wasn’t so biased.

He also gave Apple a pat on the butt, saying, “I couldn’t be happier that Apple has created a market and built up enthusiasm but longer term, open, capable and affordable will win, not closed, high price and proprietary. [Apple has] done a really nice job, they’ve got a great product, but the challenge they’ve got is that already Android is outpacing them.”

How exactly Android is outpacing Apple in the tablet space isn’t supported, but that’s only because you can’t support it. It’s unquestionable that Android has outpaced iPhone in the smartphone market (in terms of unit sales, Android is #1 in the U.S. and in the global market), but so far the iPad is crushing the competition in the tablet market. (I laid out my thoughts on why the tablet market is different from the smartphone market in an analysis piece earlier this month).

The other linchpin of Mr. Lark’s argument serves more to demonstrate why he’s a marketing exec and not an engineer: In arguing that Apple’s products are overpriced, he said, “An iPad with a keyboard, a mouse and a case [means] you’ll be at $1500 or $1600; that’s double of what you’re paying. That’s not feasible.”

I’ll tell you what’s not feasible, and that’s one Andy Lark landing a job as an accountant any time soon.

Firstly, the iPad is cheaper than the competition. There’s precisely one tablet with a starting price that matches Apple’s iPad 2 of US$499, and that’s the smaller 7” BlackBerry PlayBook that still hasn’t been released. Even there, the original iPad is still available and starts at $399. The 32GB WiFi-only Xoom, Motorola’s entry level into the tablet space, also matches the price of the 32GB WiFi-only iPad 2 at $599, but the 3G Xoom is $799, while Apple’s 32GB 3G iPad 2 is $729.

Everything else that’s actually shipping is priced higher and/or is smaller than Apple’s iPad. From Apple’s lock on the supply of key components to the volume advantage the company has on every other competitor, Apple is the Dell of the tablet space when it comes to price, while it remains the Apple of the tablet space when it comes to quality and experience.

Secondly, how in the hell is it even possible to spend “$1500 or $1600” on iPad, keyboard, mouse and case? De Bethune hasn’t announced an iPad case with a watch in it yet, and I challenge anyone to spend that much on even a 64GB 3G iPad 2 and those accessories.

Thirdly, who the hell needs a keyboard and mouse with an iPad? That is a mind-bogglingly stupid thing to say. In fact, this may well be the single most stupid statement to come out of Dell. Ever. It’s even more stupid than Michael Dell claiming to be the first PC maker to support on-board WiFi in a laptop.

I’ll posit once again that Apple is going to remain the price leader on tablets for the near future, and that it’s going to take a significant, or even a severe compromise on quality and/or features for anyone to be able to out-price Apple in this market.

While both of us are looking into the future with our claims, the difference between my claim and Dell marketing dude Andy Lark’s claim is that what I’m saying is actually supported by reality on the ground today, whereas both of Mr. Lark’s principle claims are specifically refuted by reality.