In an unusual, but interesting theory, columnist Charles Haddad opines that Apple and Dell need each other, but won’t admit it. The writer offers this supposition in his new
Byte of the Apple column
for Business Week Online.
Michael Dell, head honcho of Dell Computer,
recently knocked Apple
in a Business Week interview, saying that the company was “swimming against the tide.” Haddad points out that the CEO did the same thing three years ago and recommended that the company be liquidated as a lost cause. Then Apple made its amazing comeback. And, of course, Apple CEO Steve Jobs hasn’t had nice things to say about Dell’s boxy computer systems.
“Could Dell’s disdain be signaling once again that Apple has hit bottom and is on the rebound?” Haddad wonders. “Think about it. There’s no sport in kicking a competitor that can’t get back up. But you might want to pile on if it were beginning to regain its footing.”
The columnist thinks that Dell and Jobs are like media moguls, Ted Turner and Rupert Murdoch, in that they “love to hate one another. Publicly.” What’s the point?
“In part, the heat comes from the fact that Apple and Dell — and their chiefs — represent opposite ends of the spectrum,” Haddad said. “Apple is the showman that excels at innovation and style. In contrast, Dell is the repackager, brilliant at ever driving down the cost of computers. Dell wouldn’t dare be the first to introduce any new computer, and Apple will never be the low-cost producer.”
But, he added, there’s an even more critical reason for the public bashing: the two companies need each other. Haddad’s theory has it that Dell needs a continual stream of new features to get people to buy its computers, but doesn’t want to foot the bill for research and development, thus blowing its economic model as a low-cost producer.
“So Dell lets other companies, such as Apple, finance R&D,” Haddad wrote. “Then Dell figures out how to incorporate Apple’s innovations inexpensively into its own next-generation of computers. I can already hear Mac fanatics crying ‘thief,’ but it’s not nearly that simple. You see, Apple benefits greatly from Dell’s success. As a giant in distribution and marketing, Dell helps to popularize both Apple’s innovations and the company’s reputation as an innovator.”
The image of innovation is critical to Apple’s success, and the company doesn’t have the distribution network nor the marketing budget to reach a critical mass of users, Haddad said. Dell, Compaq, and the other repackagers do that for Apple.
“They’ve created the expectation that Apple is the stylish outsider everyone better keep an eye on,” Haddad said. “The truth is there’s room enough for both Apple and Dell in the computer industry. In fact, the two represent a pattern common in most industries. It’s like what happens in television, where the big four networks finance the production of most original programming. That hasn’t stopped Time Warner from making a pretty penny running those shows on its cable-TV channels.”
In fact, the columnist compares Dell and Jobs to Mutt and Jeff. “It’s fun to watch them quarrel, but we shouldn’t take it too seriously,” he said. “They need each other too much.”