It's been a while since I went off on something, and this seems fun so...
Dell does have a great business model, and it's their own doing for the most part. One example: inventory!
From Businessweek:
"What's Dell's secret? How has the computer maker managed to defy the naysayers and turn a classically low-margin mail-order operation into a high-profit, high-service business that's the envy of the industry? In a word: speed. Dell has long been a model of just-in-time manufacturing, but now it has upped the ante by applying the same brutal time standard to its supply chain--insisting, for example, that the bulk of its components be warehoused within 15 minutes of a Dell factory."
An accounting friend of mine recently told me that in order to become a supplier for Dell a company has to locate its warehouse in Austin, Texas. Wow, what a setup! Dell gets your money before your computer has even begun to be built, and doesn't have to keep hardly any inventory on-hand because its suppliers are all a short drive away! Contrast this to other computer retailers -- they have to build the computer first, then they ship a load of computers to CompUSA, or wherever, and often have to wait for CompUSA to sell the computer before getting their money. Of course, Dell has to do a better job of marketing, since their computers aren't on display in computer stores, but they appear to have done a very good job.
The PC industry
does look like it's heading toward total commoditization (is that a word?) but Apple is an exception to that rule, or at least is trying to be. A PC is a PC is a PC is NOT a Mac. For example:
1. Mac's run a totally different operating system. (Linux on PC's doesn't count and won't until it's really usable for normal users!)
2. A Mac is the only
consumer personal computer left whose makers can change the OS to integrate with the hardware, or vice versa.
3. Apple promotes and goes along with industry (and often open) standards instead of trying to make everything proprietary.
4. Apple seems to be the only company that thinks that form should follow function and that computer hardware shouldn't be ugly! We expect good cars to look slick, even though it's the engine that really matters. Why not computers?
5. OS X is better (warning!! opinion!) that Windows, and that makes Mac hardware better, in one sense, than PC hardware because it can run OS X.
Dell is the Walmart of computer companies. They are the behemoth that moves their industry. They have provided low prices and commoditization for the masses. Their products don't stink, they're actually pretty good. They're not the best however, and, like Walmart, they don't innovate (much).