Dell is one of the largest computer OEMs (Original Equipment Manufacturers) currently operating in the world. Based in Austin, TX, it’s a company that I and another of my relatives have worked for. You can find Dell systems in a great deal of enterprise corporations around the world, and more than a few people I know (including my parents) are loyal Dell customers.

So what has caused such a slump in Dell’s business this year? There are a number of factors, and in this article I’ll share what I think may have caused this. We’ll also share some feedback received from small business owners and enthusiasts within our Gnomies community.

Strong Competition

Why is Dell Seeing a Sales Slump?Apple has grown by leaps and bounds over the past few years. Enterprise market share (an area once dominated by Dell) is increasing for Apple, causing Windows-based PC manufacturers like Dell and HP to take note. It isn’t enough to make the “best” Windows workstation out there. You now have to make a workstation so good that it convinces corporate buyers not to go with Apple. Since Apple has captured over 90% of the high-end laptop consumer market, it stands to reason that the very people making buying decisions for their enterprise are quite possibly already customers.

Tablets and mobile computers are another area in which Dell has been slacking. Tablets are the biggest selling computers out there outside of smartphones, and with Dell failing to gain ground in this area since the Windows XP era, it’s not terribly hard to see just how badly this can impact a PC company.

Lack of Buzz

Advertising makes all the difference in the world to companies that are facing stiff competition. Dell hasn’t had a successful advertising campaign since its moderately annoying, “Dude, you’re getting a Dell” campaign kicked off about 10 years ago. Meanwhile, Apple and HP have made headlines with their ads regardless of the public believing them to be good or not. Yes, Dell has commercials running and plenty of print advertising (particularly in market publications), but I want to see something that turns my head. Otherwise, Dell as a brand is kind of boring.

Colored laptops are great, but they look pretty bland compared to the artistic design found on HP’s machines or the unibody frame found in the MacBook Pro. There just really isn’t a lot to get overjoyed about.

Innovation is another area where buzz can be quickly generated. As George Oberdorster, a member of the Gnomies community, conveyed: “Lack of innovation is definitely Dell’s problem. Dell never focused on just a single product, and hence it fell behind. If you notice, Apple focuses on one product — let’s say iPhone first gen — and scraps the rest until it’s mainstream. Apple scrapped the iPad until iPhone gained market share. It also learned from its mistakes. Hence, that is a main reason why Apple is on top at the present time.”

Waiting for Windows 8

About a quarter before Microsoft releases a new OS, there’s usually a slump in sales. This is due in part to people not wanting to go through the hassle of upgrading right after purchasing a new system. There’s also a delay because some folks want to try Windows 8, but because it hasn’t been released to the public officially yet, there isn’t enough info about just how good (or bad) it might actually be.

For most corporations and consumers out there, what they have right now is just fine. Why upgrade what isn’t broken?

Image: Yahoo Finance