I'm seeing an equally disturbing trend in the Auto Repair industry. Since the internet developed, and DIY Auto Parts stores (such as Autozone) have become popular, it is increasingly more and more difficult to stay profitable. With the low cost of parts due to bulk (and overseas parts) available to the large chain shops, small and independent shops really don't stand much of a chance anymore. Throw in the requirements for dozens upon dozens of thousands of dollars worth of diagnostic equipment for modern vehicles, and that's like throwing salt in the wound.
It's hard to justify the price for a part to a customer when your COST is more than what they can get it from Autozone for. Granted, the quality may be like night and day, and the part you're trying to sell them may be made in the USA (Vs. China for the Autozone part), but all they see is "lifetime warranty" and half-the-price. Then you get the reputation for trying to price-gouge them... and the sad thing is that they are right! It's gotten to the point in which you have to tack on to the cost of the people who don't do their research to compensate for the business you lose from the ones who can get cheap Chinese parts from these chain stores (and FREE loaner tools, and FREE repair instructions)... and when they run into problems from doing it themselves or because of defective parts, they come to you and then complain to the BBB when you have to charge them $300 for a job that would have cost them $100 in the first place, so when this happens it's almost not worth the headache to even get involved.
Next thing you know, you have to get cheap Chinese made parts as well just to stay competitive and profitable, because simple business rules dictate that it makes no sense to stay in business if you're not making money... and things just spiral downwards from there.
Now... how does this compare to Dell? I'm not exactly defending them... but you have to look at the large picture here. First off, I doubt seriously they actually installed these capacitors onto the motherboards. More than likely they purchased these motherboards pre-built from the lowest bidder who could meet their hardware specifications. Kind of like Toyota... they didn't build their gas pedal assemblies... they installed ones that were already made... in China. To stay competitive, they people who did build these motherboards chose cheap Chinese-made parts over more expensive and more durable ones. They took a gamble that the cheaper ones would last long enough for the warranty to run out, and warrantying the few that didn't last that long would still be cheaper for them in the long run.
Once Dell learned that these motherboards didn't make the grade in durability, they were forced to make one of three decisions:
1> Issue a recall and replace all of the motherboards... this would have likely bankrupted them.
2> Handle these on a case-by-case basis and replace the failed motherboards with quality ones, and throw away all of their existing stock and start using quality parts from that point on... while this could have been a brilliant long-term plan on their end if marketed correctly, it would have still cost them a fortune... causing losses for quite some time and destroying their stock prices.
3> Bury their heads in the sand and keep doing things the same way, keeping their profits high and their shareholders happy for as long as possible... unfortunately it seems that the bigger a company gets the more short-sighted they become. They choose short-term gains over long-term stability, almost in a self-destructive way. Why do they do this? It's quite simple.. because TOO MANY PEOPLE HAVE TOO MUCH INVESTED in this point. It's all about throwing the wool over their eyes for as long as possible.
And folks, believe me.. this is still only the beginning. As long as people continue to cut corners.. clip coupons.. choose the lowest bidder.. use price as their only deciding factor... sue the second things go wrong.. well things will only continue to get worse. I'm seeing a disturbing trend with large companies following practices that look good in the sort term, but really cost them later on. Kind of like taking on a $10,000 loan at 500% interest... yes the case looks good in your hands when you get it, but what happens next year?
Companies think that outsourcing parts, repairs, and customer service overseas is a good idea, but it will (and is already starting to) bite them in the ascot. I'm sorry, but when you take into account the logistics involved, there is NO WAY you can tell me that having a heavily accented, engrish-speaking guy in India who goes by the name of Bob Barker do your customer service is going to be cheaper in the long term. If they would take the time to FIX their products, documentation, and procedures they would find a way to eliminate the vast majority of customer service needs. Take HTC for example... they are finding themselves having to devote a large amount of time telling people to alt-tab out of the program so they can click a box to allow a new update through their software firewall... so now they are FIXING the main screen so that it will allow this window to the foreground. Granted, it's become a bit more of a pain then anticipated, but they are getting the job done. In the long-term it will be better.
There are two sayings that hold true to my philosophy: "An ounce of prevention is worth a pound of cure" and "Just because you can doesn't mean you should". I wish companies would follow these more often.
I hope that this whole Dell issue becomes more of an eye-opener than a huge lawsuit. I would rather people learn from this and adjust their spending habits and practices, rather than to jump on the "class-action bandwagon". Personally, I think class-action lawsuits are a huge wound to the American legal system.
