Dell and its business model has been the focus of a lot of comment on Apple oriented forums in recent months. The Dell model is said to be unviable, and Dell"s recent news is said to prove this. A limited endorsement of sorts for the so called "end to end model" in music has been published by Walt Mossberg in the WSJ. If the advocates of the so-called "end to end model" are right, it implies that the industry structure which allows us all to source hardware from wherever we want, and run a variety of OSs on it, is in danger.
But it is worth taking the time to look at the facts carefully. There can not be much argument about what they show. They show that for 10 years, Apple"s revenues and profits have fluctuated, but Dell"s have grown consistently. From this, you can see that in computers, Apple is basically a no growth company. The revenue growth which theat Apple shows is mostly due to iPod sales, which are now reported to be 40% of revenues.
Apple PC market share was 4% in 1999, then fell, with some ups and downs, to a bit over 2% currently. There seems to be a lower limit of around 2%, but the trend has been steadily down for the last 5 or 6 years. In summary, Apple is not growing in computers, and its market share is falling.
Why has this happened? Two main reasons. Apple is in a distinct segment: the segment of the locked hardware/software combination. This segment has not been growing. The segment consisting of OS on hardware from a variety of sources has been growing. Second, Dell has executed better. It has controlled costs, increased share of its growing segment, and supplied what the market wanted in terms of total mix, channel, package, support.