|Dell’s first “iPod killer,” the Dell Digital Jukebox, was discontinued in 2006 …|
From: Jon Fortt
To: Michael Dell
Subject: Taking down the iPod
You might remember our recent chat at Fortune’s Brainstorm Tech conference, when you shared with me a theme you’ve sounded before: “I think the sign of a great company is that it can kind of learn from its mistakes,” you said, “and go on to greater heights.”
You were talking about Dell’s
PC business, where you’ve tweaked the direct sales strategy in response to a changing market. But you could just as easily have been referring to your company’s tentative plans to release another MP3 player this fall to compete with Apple’s
iPod. I think if you follow your own observation, you’ll delay the product launch. Dell’s not ready to make this mistake again.
Let’s think back on your first effort at dethroning Apple. It crashed and burned. The Dell Digital Jukebox, which resembled nothing more than an electric razor when it launched in 2003, tried to use commodity components and licensed software to beat the iPod on price, and thus win market share. But the DJ fell short in physique (bigger and heavier than the iPod), originality (it was based on another company’s design) and music management software. Dell used Musicmatch Jukebox, which was, well, no musical match for Apple’s iTunes.
To your credit, this time around Dell executives seem to be considering a slightly different tack. Not only have you gotten better at designing devices, you see the folly in just making a gadget that depends on someone else’s software to operate. Dell now has its own: You last year purchased Zing Systems, a company that uses Wi-Fi to beam songs – and potentially video – to various devices. The new plan would be to blend this improved software with snazzier hardware.
But I’ll argue there’s a better route for you to take, if you really want to K.O. the iPod: Hold off on the gadget. First, just launch the software.
I know this is a little counter-intuitive. People love gadgets! But hear me out.