Steam Machines and 3D cameras: How Dell’s using innovation to draw attention
By Agam Shah
In a copycat PC industry, Dell is trying to attract attention with the innovative features and technology firsts that it is bringing to PCs and tablets.
Dell is adding new hardware and software features that could make an otherwise mundane PC or tablet more attractive to customers. Buyers may have to pay more for the features, but like Apple, Dell hopes to establish a reputation as an innovator and establish a fan base.
The 8-inch Venue 8 7000 tablet, for example, has drawn attention for its creative design. Unveiled earlier this month at the Intel Developer Forum, it’s the world’s thinnest tablet at 6 millimeters thick and includes Intel’s RealSense 3D depth-sensing camera. The camera can determine size, distance and contours of objects, which could enhance videoconferencing or make it easier to capture a 3D image for 3D printing.
Historically, the company was not known as a great innovator. It started out in CEO Michael Dell’s dorm room 30 years ago and made strides as a maker of low-cost IBM PC clones selling direct to end users. After going public, and various ups and downs over the years, it became a private company once again last year. Though Michael Dell and investment partners fought a protracted battle with some big shareholders to take the company private, the dust kicked up by the privatization fight seems to have settled.
In fact, the privatization has helped tune out distractions and helped the company focus on improving products, said Kirk Schell, vice president of the commercial PC product group.
There’s a lot of energy in Dell’s PC operations, Schell said.
“The privatization seems to have focused the company on the purpose and the customer,” Schell said. “The amount of time now that we have freed up by being private, we get to spend with … customers and really honing how we improve our company and product line.”
Hewlett-Packard, Lenovo and Asustek have been innovative in their own right, but Dell has been pragmatic about balancing the adoption of new technologies with the price of PCs, said Roger Kay, principal analyst at Endpoint Technologies Associates.
“Dell’s always wanted to be stylish and had mixed results in that department,” Kay said. “Because they are no longer reporting to Wall Street, they can be more competitive.”
The company can now boast some industry firsts, several of which are tied to the Venue 8. For example, it was also the first to bring wireless charging capabilities to tablets with a dock for Venue 8.
In the external display market, Dell was among the first to introduce a 5K screen with the UltraSharp 27 Ultra HD, which can display images at a 5120 x 2880 pixel resolution and will become available later this year.
Dell is also the only top PC maker with a gaming console, the Alienware Alpha Steam Machine, which will compete against Microsoft’s Xbox One and Sony’s PlayStation 4. The Steam Machine taps into the growing excitement around PC gaming, and will ship in November with Windows 8.1 as the default OS. Users in the future will have the option to install the Linux-based SteamOS, which is being developed by Valve, the world’s largest independent game distributor.
Another innovation is Dell Cast, a USB adapter that can mirror images from Android-based Venue tablets on high-definition screens. The thumb drive-size adapter is thinner than Google’s Chromecast, which also mirrors movies and Android screens. But Dell is bringing the technology to Windows as well.
Over the years, Dell laptops have become thinner and lighter, but also more robust thanks to use of materials like carbon fiber. Not every product—like the XPS 10 tablet with Windows RT—has succeeded, but the company appears to understand the value of diversifying its product lineup.
However, while the technologies and designs may add a wow factor, there’s no guarantee of success in a competitive PC market, Kay said.
“I don’t see it as a competitive advantage, I see it as a distinction,” Kay said.
Meanwhile, Dell is likely to continue making low-cost PCs, Kay said. And as long as the low-margin PC business can foot some bills, Dell will also continue investing in design and innovation, he added.
As it has changed its philosophy in building PCs over the past few years, emphasizing innovation, Dell has learned a lot about product specifications, testing and materials, Schell said.
He gave the example of Corning’s Gorilla Glass screen, which the company has customized to fit on its laptop screens.
“We’re investing in architects, human factor engineers, material scientists, software people. You can and should differentiate, and we are,” Schell said.
The past, the future
Dell in the 1990s grew at a fast pace with a business model resting on building PCs to order and shipping them directly to customers. Dell became the world’s top PC maker in 2001, but the quality of its PCs suffered after the company reverted to low-cost production methods to keep up with HP and IBM, whose PC division was bought by Lenovo in 2005. Dell eventually lost its top ranking to HP in 2006, and Michael Dell returned to his post as CEO in 2007 after a spell away from the job.
In 2009, Dell caught headlines with its premium Adamo slim laptop, which was considered a competitor to the MacBook Air at the time. The brand was eventually merged into the XPS line. Many innovations followed, such as a wireless charging dock for PCs in 2009 and a WiGig dock in 2013.
Innovation is one way to attract customers, and new software and hardware features are coming to more products, Schell said.
“We have a lot of stuff in the hopper that we’re working on,” Schell said.
While Schell declined to spill the beans about new products, he offered some hints about what Dell is focusing on.
“We’re working on a number of productivity and security-based things.”
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