Author Topic: Heads up on Dell lawsuit  (Read 1070 times)

Offline Bino

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Re: Heads up on Dell lawsuit
« Reply #15 on: July 09, 2010, 08:19:48 PM »
One thing I've noticed about the big companies I've worked for: the bosses are rewarded each quarter, based at least in part on how the stock does.  So, since they get their stock options on a three-month cycle, that is as far into the future as they will plan. 

And they will do *anything* to drive up the stock price in the short term, so they can cash out their options as fast as their contracts will allow.  I have personally listened to a Fortune 500 CIO admit that spending millions of dollars on Big Blue consultants to "fix" a problem with an e-commerce system - a problem which had been both predicted and diagnosed by her own in-house IT staff - was nothing more than a dog and pony show meant to assuage the nervous nabobs of Wall Street.

Short-sightedness is enshrined in the compensation plans of big American companies.  We are *so* screwed here, people.


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Offline ntrudr

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Re: Heads up on Dell lawsuit
« Reply #16 on: July 10, 2010, 06:03:29 PM »
It's not just Dell that has the leaking capacitor problem. Other major PC manufacturers have the very same issue.  I know I work for one and have seen this issue myself.



Offline Masherbrum

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Re: Heads up on Dell lawsuit
« Reply #17 on: July 10, 2010, 11:19:40 PM »
It's not just Dell that has the leaking capacitor problem. Other major PC manufacturers have the very same issue.  I know I work for one and have seen this issue myself.




I keep hearing this, but I have yet to see a single, credible source stating "other brands". 
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Offline ntrudr

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Re: Heads up on Dell lawsuit
« Reply #18 on: July 20, 2010, 07:00:34 AM »
I keep hearing this, but I have yet to see a single, credible source stating "other brands". 

Take my word for it, this is not hear say. I have personally replaced other brands components due to leaking capacitors.


Offline Tigger29

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Re: Heads up on Dell lawsuit
« Reply #19 on: July 20, 2010, 11:14:16 AM »
I keep hearing this, but I have yet to see a single, credible source stating "other brands".  

Masherbrum, with other manufacturers it's definitely not as widespread as with the Dells, but it is there.  I've seen first hand a couple of emachines with that problem, and an old Biostar "slot-A" motherboard I used in a custom system built by me years back suffered that same ill-fate.  Granted that may have been an isolated incident, but it still happened.

I doubt seriously that Dell hand-picked these specific capacitors, and I also doubt further that they even build their own motherboards.  Like I was saying before, they most likely simply picked the 'cheapest bidder' of who can supply motherboards to meet their specifications.  It's the manufacturer of that motherboard that chose to use the cheap capacitors.  To make matters worse, they probably had to low-ball their prices like crazy in order to win Dell's contract which necessitated using these sub-par capacitors in the first place!

So here is how the process SHOULD work:

Company A wants to build and sell widgets.  Company A needs a supply of whatchamacallits to build their widgets with.  Company A weighs their options from several manufacturers of whatchamacallits, factoring in not only cost, but also quality, manufacturers' reputations, source of raw components, etc.  Company A ends up purchasing whatchamacallits from Company B even though they cost slightly more than Company Q's whatchamacallits because Company Q has a bad reputation for quality.

Company A builds and sells their widgets using whatchamacallits purchased from Company B.  Company A has to warranty one out of every ten thousand widgets because of a defective whatchamacallit.  Company A can afford to do this because they made a comfortable profit off of the widgets, and because Company B will replace the defective whatchamacallits because they can afford to do so from making a comfortable profit from the purchases from Company A.

And then THIS HAPPENS:

Company C sees that Company A is making large profits from their widgets, so Company C decides to build their own version of the widget, called a wadget.  Company C needs to sell these for less money in order to be competitive with Company A.  Company C also needs a supplier of whatchamacallits but in order to save money they choose to buy their whatchamacallits from Company Q, basing their decision solely on cost.

Company C builds and sells wadgets using whatchamacallits purchased from Company Q.  Company C has to warranty one out of every thousand of these during their much shorter warranty period.  Company C can afford to do so because they made a comfortable profit off of their wadgets, and because Company Q will replace the defective whatchamacallits because they can afford to do so from making a comfortable profit from the purchases from Company C.  They did this by using extremely cheap and questionable materials in their whatchamacallits, knowing some would fail and taking that into account.

And then IT GETS INTERESTING:

Company A is losing sales because Company C is so much cheaper.  While the wadget has a reputation for having less quality than the widget, people are choosing it anyway because the price difference is so huge.  Company A needs to cut costs so they can now compete with the wadget.  They decide to take on new bids for their whatchamacallits.  Company B, not wanting to lose out with doing business with Company A decides to lowball their whatchamacallit prices lower than what Company Q is selling them for, but adds a clause in the contract stating that they are not responsible for warrantying any that fail.  Company A decides to take that risk, basing their decision on the one in ten-thousand failure rate they experienced before.

The problem is that since now Company B isn't bound to warrantying their whatchamacallits, they end up buying their materials from a Chinese company even CHEAPER than what Company Q is using.  This result in the once great widgets that Company A sells suffering from a one in one hundred failure rate instead of their previous one in ten thousand failure rate.  Since Company A cannot get reimbursed for the bad whatchamacallits from company B, they have to eat the costs themselves in having to warranty these units.  And since they didn't make much money due to having to sell them so cheap to compete with the wadgets, then they are left with replacing a cheap part with an equally (or even MORE) cheap part... or to take a loss and go bankrupt.

So.. in this scenario.. what could company A have done?  Don't get me wrong, I still believe that competition is a good thing, but when consumers have been impregnated with the idea that 'cheaper+discount+coupon=good', and when consumers base their decisions SOLELY on price... or even worse.. SOLELY on a pothead teenager in a TV commercial.. well then competition is no longer on a level playing field.  Believe it or not, an educated consumer and competition do go hand-in-hand, but until people learn that low-flow toilets are a bad idea** we're just going to see this kind of thing continue to spiral downward.

Luckily, with the internet evolving the way it is and with people taking more stock in online ratings and reviews of products, I AM starting to see a trend of people willing to spend more money for a better quality product.


**Low flow toilets ARE a bad idea.  They use 50% less water which on paper seems like a good idea, but when you have to flush them three times or more that kind of defeats the purpose.  Basically I use it as a metaphor (or is it a simile.. I never can remember) for situations where trying to save money ends up costing more in the long run.

Offline Masherbrum

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Re: Heads up on Dell lawsuit
« Reply #20 on: July 20, 2010, 01:15:39 PM »
Masherbrum, with other manufacturers it's definitely not as widespread as with the Dells, but it is there.  I've seen first hand a couple of emachines with that problem, and an old Biostar "slot-A" motherboard I used in a custom system built by me years back suffered that same ill-fate.  Granted that may have been an isolated incident, but it still happened.

I doubt seriously that Dell hand-picked these specific capacitors, and I also doubt further that they even build their own motherboards.  Like I was saying before, they most likely simply picked the 'cheapest bidder' of who can supply motherboards to meet their specifications.  It's the manufacturer of that motherboard that chose to use the cheap capacitors.  To make matters worse, they probably had to low-ball their prices like crazy in order to win Dell's contract which necessitated using these sub-par capacitors in the first place!

So here is how the process SHOULD work:

Company A wants to build and sell widgets.  Company A needs a supply of whatchamacallits to build their widgets with.  Company A weighs their options from several manufacturers of whatchamacallits, factoring in not only cost, but also quality, manufacturers' reputations, source of raw components, etc.  Company A ends up purchasing whatchamacallits from Company B even though they cost slightly more than Company Q's whatchamacallits because Company Q has a bad reputation for quality.

Company A builds and sells their widgets using whatchamacallits purchased from Company B.  Company A has to warranty one out of every ten thousand widgets because of a defective whatchamacallit.  Company A can afford to do this because they made a comfortable profit off of the widgets, and because Company B will replace the defective whatchamacallits because they can afford to do so from making a comfortable profit from the purchases from Company A.

And then THIS HAPPENS:

Company C sees that Company A is making large profits from their widgets, so Company C decides to build their own version of the widget, called a wadget.  Company C needs to sell these for less money in order to be competitive with Company A.  Company C also needs a supplier of whatchamacallits but in order to save money they choose to buy their whatchamacallits from Company Q, basing their decision solely on cost.

Company C builds and sells wadgets using whatchamacallits purchased from Company Q.  Company C has to warranty one out of every thousand of these during their much shorter warranty period.  Company C can afford to do so because they made a comfortable profit off of their wadgets, and because Company Q will replace the defective whatchamacallits because they can afford to do so from making a comfortable profit from the purchases from Company C.  They did this by using extremely cheap and questionable materials in their whatchamacallits, knowing some would fail and taking that into account.

And then IT GETS INTERESTING:

Company A is losing sales because Company C is so much cheaper.  While the wadget has a reputation for having less quality than the widget, people are choosing it anyway because the price difference is so huge.  Company A needs to cut costs so they can now compete with the wadget.  They decide to take on new bids for their whatchamacallits.  Company B, not wanting to lose out with doing business with Company A decides to lowball their whatchamacallit prices lower than what Company Q is selling them for, but adds a clause in the contract stating that they are not responsible for warrantying any that fail.  Company A decides to take that risk, basing their decision on the one in ten-thousand failure rate they experienced before.

The problem is that since now Company B isn't bound to warrantying their whatchamacallits, they end up buying their materials from a Chinese company even CHEAPER than what Company Q is using.  This result in the once great widgets that Company A sells suffering from a one in one hundred failure rate instead of their previous one in ten thousand failure rate.  Since Company A cannot get reimbursed for the bad whatchamacallits from company B, they have to eat the costs themselves in having to warranty these units.  And since they didn't make much money due to having to sell them so cheap to compete with the wadgets, then they are left with replacing a cheap part with an equally (or even MORE) cheap part... or to take a loss and go bankrupt.

So.. in this scenario.. what could company A have done?  Don't get me wrong, I still believe that competition is a good thing, but when consumers have been impregnated with the idea that 'cheaper+discount+coupon=good', and when consumers base their decisions SOLELY on price... or even worse.. SOLELY on a pothead teenager in a TV commercial.. well then competition is no longer on a level playing field.  Believe it or not, an educated consumer and competition do go hand-in-hand, but until people learn that low-flow toilets are a bad idea** we're just going to see this kind of thing continue to spiral downward.

Luckily, with the internet evolving the way it is and with people taking more stock in online ratings and reviews of products, I AM starting to see a trend of people willing to spend more money for a better quality product.


**Low flow toilets ARE a bad idea.  They use 50% less water which on paper seems like a good idea, but when you have to flush them three times or more that kind of defeats the purpose.  Basically I use it as a metaphor (or is it a simile.. I never can remember) for situations where trying to save money ends up costing more in the long run.

Absolutely, I've been floored at the quantity of Dell's and the fact they knew ahead of time, they screwed the pooch.  

Good post man!
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http://worldfamousfridaynighters.com/
Co-Founder of DFC

Offline gyrene81

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Re: Heads up on Dell lawsuit
« Reply #21 on: July 20, 2010, 02:01:05 PM »
Just FYI, HP had the same issue some 6 years ago with their micro atx mobos. Where I work we had several thousand of their D-530 mini desktop units, 80% had bad capacitors. The only thing Dell did wrong was to try and plead ignorance instead of dealing with it. Can't really blame them though, the profit margin on a retail system is very slim, they deal in volume. In the retail computer industry where most of your business is the home user, price gets you volume sales and those sales build your company.


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Michael Dell is an idiot. nuff said.
Not even close. Considering Apple started building personal computers in 1977, went public in 1980 and didn't start hitting it big until they dropped their proprietary junk...and they still don't have as big of a market share as Dell, HP or even Acer. Dell has been in the top 5 in world wide pc sales since it went public in 1992, when Apple was still marketing over priced stone age desk anchors.
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Offline RTHolmes

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Re: Heads up on Dell lawsuit
« Reply #22 on: July 20, 2010, 04:38:03 PM »
Not even close.

nope, not close, exactly right. 1st price is market open the morning after michael's wise words, 2nd price is a spot taken when I posted. if you think his "advice" was good for apple's employees, stockholders, suppliers, endusers or the PC market itself (or even broadening it out to competitive markets in general) then ... you're just plain wrong. like dell was.
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Offline cattb

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Re: Heads up on Dell lawsuit
« Reply #23 on: July 21, 2010, 12:30:27 AM »
I keep hearing this, but I have yet to see a single, credible source stating "other brands". 
Google bad caps or bad capicitor and research, there were a few companies that were pinched a few years ago by a supplier. I have read some on this , but never did a whole lot of research.
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