How Dell Product Managers Dropped The Ball On Tablet Computers

by drjim on October 17, 2011

The Streak Sure Looks Pretty, But It Missed The Mark…

The Streak Sure Looks Pretty, But It Missed The Mark…

If there was such a thing as a standard product manager job description, then you’d think that it would contain the phrase “… be responsible for developing products that solve problems and sell well…” The product managers over at Dell recently had a fantastic opportunity to create a tablet product that would take over the world. How come they missed the mark…?

Say Hello (And Goodbye) To The Streak

As all of us writers are so fond of saying, assuming that you’ve not been living under a rock for the past year or so, you should know that those tiny tablet computers seem to be taking over the world. Right now the iPad 2 from Apple rules the world, but it won’t be that way forever.

I can’t quite remember where I read it, but somewhere I ran across a study that showed that the companies that create a new market generally only capture 3% of it over time. That means that all of the firms that follow end up getting 97% of the total revenue over time. This means that the tablet market will eventually be ruled by firms other than Apple. Dell is one firm that would seem to be well positioned to own a big chunk of this market.

The problem is, of course, that initially Dell didn’t have a tablet computer to sell. Each Dell account manager was probably complaining to their business development manager who in turn came to the product manager and said “We need a tablet computer.”

Forget what it says on your product manager resume, dreaming up new products when account managers ask for them goes with the territory. However, this is where things went wrong. Dell talked about the fantastic new tablet computer that they were going to be bringing out back in January of 2010. However, the darn thing wasn’t available to buy in the U.S. for another 8 months.

This delay gave Apple more time. More time to launch the iPad. More time to have more iPad apps to be created that can be sold in their AppStore. More time for the world to associate “tablet computer” with “iPad”.

What Went Wrong At Dell

Dell is a big company and it does a lot of things right. However, when it comes to creating the next generation of tablet computers it seems to have dropped the ball. This of course leads to the question: why? How did the Dell product managers let this happen?

It appears as though a bit of strategic management is what was missing here. Dell has a fundamental problem when it comes to tablets: Dell is a company that primarily serves business customers. At this point in time, tablet computers are primarily a consumer product. It can be very hard for B2B product managers to switch and become B2C product managers.

On top of the excessive delay in launching their tablet computer, the Dell product managers made an additional series of missteps. The first of these was to create an initial Streak that had both a 5″ display and a price tag of US$500. This would have been impressive if it were not for the fact that the Apple iPad had both a larger display for the same price.

Over time as sales lagged, Dell ended up cutting the Streak’s price all the way down to US$180. As the word came back from the account managers and the business development manager, the product managers introduced follow-on products. The Streak 7 came to the market with a couple of strikes against it: its battery didn’t last long enough and its screen was relatively low-resolution. Oh, and Samsung’s Galaxy Tab showed up at the same time with a better display and an updated operating system.

The Dell product managers have grand plans for the future; however, their actions so far have not yielded results that they can build on. Truly, the Dell product managers have dropped the ball.

What All Of This Means For You

As product managers, one of our jobs is strategic management. This means that the new products that we are developing need to meet the needs and expectations of our potential customers. Clearly this has not happened over at Dell when it comes to tablet computers.

What went wrong? The tablet space is a fast moving market and it sure looks like Dell’s internal product development processes were developed to meet the needs of their slower moving business customers, not the fast moving world of consumer products. The initial product announcement in January was ok only if the product was close to being ready to ship – it sure looks like that wasn’t the case.

Product managers need to have the guts to pull the trigger and kill a product launch if a product that they are responsible for just isn’t going to meet their customer’s needs. Clearly Dell needs to make some significant changes to their new product development process. We can all learn from Dell’s missteps…

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: If you were a product manager at Dell, how would you make sure there was still a market for your product?

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What We’ll Be Talking About Next Time

How do you find your way around these days? If you are like most of us, you probable own one of those pocket sized GPS receivers that show you a map of where you are and how to get to where you want to go to. Lots of companies make these, but Garman was one of the first and still holds a big chunk of this market. How are their product managers doing this?

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{ 1 comment… read it below or add one }

Finance For Non Financial Managers Training October 24, 2011 at 9:48 am

Yeah, it took them a while to find their footing. And that may cost them.

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