'Dell 2.0' will focus on PC design, overseas factories

Dell, besieged by a battery recall and a federal investigation, is launching a corporate makeover called "Dell 2.0' in an effort to ally nervous investors.

In a bid to reassure nervous investors in the wake of a federal investigation and a battery recall, Dell executives have announced a corporate overhaul dubbed "Dell 2.0."

The strategy calls for Dell to recover from slumping profits by making a series of basic changes, such as building factories closer to emerging markets, and putting more emphasis on industrial design, Chief Executive Officer Kevin Rollins said Tuesday in New York at Dell's annual Technology Day.

"We've spent the last 22 years following the Dell business model, but as the marketplace changes, the needs and desires of our customers have also changed," Rollins said. "We are re-evaluating every aspect of our business model, from supply chain and design to customer service and support."

Dell is suffering through a brutal stretch. The company announced on Monday that it would delay filing its quarterly Form 10-Q because an investigation by the U.S. Securities and Exchange Commission had raised the possibility Dell might have to restate past quarterly earnings figures. And in August Dell worked with the Consumer Product Safety Commission to recall 4.1 million laptop batteries with a defect that could cause them to overheat and possibly catch fire.

Under its new plan, the company will form a team of 60 designers by the end of 2006, dedicated to improving the design and usability of Dell PCs instead of focusing solely on price and performance. And the company has already begun to move away from its centralized production model by building PC factories in emerging markets like Brazil, India and Central Europe, he said.

In other aspects of the overhaul, Dell said in July it would begin using consistently low prices instead of complex rebates, and said in June it would offer enterprise-scale IT management to midsize companies under a Platinum Plus services plan.

The strategy extends to products, too. Under the new strategy, Dell will continue to design PCs with chips from Advanced Micro Devices (AMD). Until recently, Dell had used only Intel processors, but this week launched two AMD-powered desktops and plans to sell AMD-based servers by the end of 2006.

Dell's transition to a two-processor company is harder than simply swapping chips, said Chief Technology Officer Kevin Kettler. As Dell engineers create AMD-based PCs, they face a host of challenges -- testing and evaluating the systems, creating a logistics plan to supply processors to factories worldwide, and fitting the new components into their supply chain management plans.

"Any time you bring on a new vendor to introduce a major piece of silicon, there's a natural process of aligning the new technology with our products," Kettler said. "I personally have worked for seven years with AMD on Dell's behalf, driving Opteron technology into the server space. This is not a short term, one-product-and-out deal, but a long-term relationship."

In another design-centric change, Dell will join Hewlett-Packard and Lenovo Group to use DisplayPort, an interface standard that enables high-speed, two-way communications between PCs and displays. The new specs were approved in May by a governing body called the Video Electronics Standards Association.

Under current technology, engineers use graphics controllers inside PCs and TVs to send signals to either digital or analog monitors ranging from CRTs (cathode ray tubes) to LCDs (liquid crystal displays) and plasma screens. "Those interfaces all just evolved, so you need to do development over three different interfaces with a multitude of technologies, and you can't take advantage of shared resources," said Kettler.

In contrast, the new standard will use PCI (Peripheral Component Interconnect) Express interface to forge a "direct drive" link between the PC and monitor, always keeping the information in digital format. That will allow designers to build displays with embedded cameras and microphones, and will also preserve digital rights management, ensuring that data flowing across the cable can be only displayed, not copied, Kettler said.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Ben Ames

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?