Dell's Rollins dismisses iPod as a 'fad'

Kevin Rollins,
president and CEO,
Dell

In an interview with Silicon.com at Dell's headquarters here last week, Rollins said that the number of headlines Apple grabs does not worry him and that the company isn't "in the same league" as Dell.

"It's interesting the iPod has been out for three years and it's only this past year it's become a raging success," said Rollins, who is also Dell's president. "Well, those things that become fads rage, and then they drop off. When I was growing up there was a product made by Sony called the Sony Walkman--a rage, everyone had to have one. Well, you don't hear about the Walkman anymore. I believe that one-product wonders come and go. You have to have sustainable business models, sustainable strategy."

But Rollins was careful to add that this wasn't meant as any kind of disparagement of Apple. "They've done a nice job," he said.

Apple announced its new $499 entry-level Mac Mini--which is aimed at tempting wavering PC users to the Apple camp--last week, while Silicon.com was visiting Dell's headquarters.

But given Dell's historical commitment to aggressive pricing in the PC market and its dominant position in the United States, Rollins was, not surprisingly, unimpressed with the Mac Mini.

"It might take some here and there, but Apple's market share in the global computer business has really shrunk pretty far," he said. "Where they've been making success recently is not in the computer business, but in the iPod music business. So this might be an interesting new product, but I'm not really believing this is going to turn the industry upside down."

"Funny how four years ago Michael Dell said Apple should close shop and pay off its investors. I took that as a sign to buy some Apple stock. In FY2004, Dell stock price increased 18% and Apple's stock price went up 330%. It's good to invest contrary to Dell's advice."
--Jeff Lebowski

Dell recently extended its foray into the consumer market with a music download service to go with its own MP3 player, but Rollins said Dell will continue to make business customers its No. 1 priority.

"Our strategic focus has been on corporations and institutions, and selling them large server clusters and huge SAN (storage area network) installations," he said. "The data center isn't very sexy to write about but, frankly, that's where the money is. No. 1 is corporations and institutions."

Andy McCue of Silicon.com reported from Round Rock, Texas, where he traveled as a guest of Dell.