If you think PCs have gone stale and Apple (AAPL) is among the few companies doing something right in the computer market, you’re not alone.
In an interview with Coins2Day, Dell’s Frank Azor, general manager for the company’s XPS line of computers, acknowledges that “Apple was the first [computer vendor] to recognize that people will pay a premium price for a premium piece of technology.”
Indeed, Azor believes Apple has been successfully delivering “uncompromising (computers) for a long time” and has covered “a lot of ground” that PC vendors, including Dell, have been forced to “make up.” But according to Azor, whose company recently unveiled a new line of high-end XPS computers, Dell is now ready to “make the PC cool again.”
“We have become the first and only company to give Apple a run for its money,” says Azor, referring to his company’s XPS line. “We want to get the PC back to a place where it’s a product for customers, built for customers, and exceeds anything Apple and others have accomplished.”
Apple has long been considered the gold standard in innovative computing. The company has for the last several years offered high-end products at premium prices. Apple has also been among the first companies to experiment with new materials, like metals, and combine high-powered processors with a premium price. Meanwhile, Apple’s Mac sales have soared. During its last-reported fiscal third quarter, Mac revenue exceeded $6 billion worldwide. Four years ago, Apple’s Mac sales revenue stood at $5.1 billion.
Meanwhile, traditional PC vendors, including Hewlett-Packard (HPQ) and Dell, were chasing a tired business model, Azor says. For decades, initial success for companies like Dell was built on making computers cheaper and therefore “more accessible to people around the world.”
“Then something happened around the 2006 time frame for the entire industry when we hit a ceiling on how affordable we could make computers,” he says. “Value and price was still important, but there was an emerging segment that really valued premium products. That premium price had been ignored for a long time after that.”
Dell was among the first major companies that suffered from that dramatic shift in the marketplace. The company’s profits started to tumble, shareholders revolted, and debate ensued over whether Michael Dell, the company’s founder, should still be in charge. After a nasty war with activist investor Carl Icahn, Dell eventually made his company private in 2013. He promised at the time that the $25 billion deal would allow him to sell more products and take more chances. It took Dell just months to ask Azor—who co-founded Alienware, a favorite PC brand among gamers that Dell acquired in 2006—to take over XPS and compete with Apple’s cool factor. Dell also gave Azor’s team “leeway to be innovative and experiment.”
“Here we are today after seeing a strategy adjustment in 2014 that was to focus on building really innovative and badass notebooks,” he says. “But we were going to start focusing on doing it at a price point to disrupt the market.”
Disruption—and taking on Apple—is at the core of the XPS strategy. Earlier this year, Dell unveiled the XPS 13, a svelte, high-end notebook aimed at the 13-inch MacBook Pro. It promptly won design awards and became a popular option for Windows shoppers. Last week, Dell upped the ante again by improving the XPS 13. More importantly, it showcased the XPS 12, a 2-in-1 hybrid featuring a high-end display and sleek design.
The company’s new XPS 15 laptop comes with a 4K Ultra HD display, the latest-generation Intel Core processors, and solid graphics performance. Dell believes the XPS line is “best-in-class,” topping standards, like Apple’s MacBook Pro, on design and performance. But arguably the most important feature, Azor says, is Dell’s decision to offer the XPS 15 at a starting price of $999. The XPS 12 and XPS 13 go for $999 and $799, respectively. Comparably equipped MacBook Pros can be hundreds of dollars more expensive.
“People will think XPS is cool because they will be amazed [by the experience],” Azor says. “We want to get the PC back to being cool again. There’s a great amount of innovation and technology going into our products. Even greater than what Apple is doing.”
Still, Dell has no confusion about its place in the market. The company is the world’s third-largest PC maker behind Lenovo and Hewlett-Packard. In the premium, “cool” end of the market, Azor admits that Dell is “definitely not ahead of Apple,” adding that the Mac maker has a “head start” that spans more than a decade. Over that period, as Apple has become the “cool” device maker, Dell made mistakes it’s now trying to address.
“I think XPS is a symbol of our commitment to innovation and building trust again,” says Azor. “Building trust with customers over time that we may have disappointed.”
Building trust, which Apple has already done with its Mac brand, is no easy task. For the last several years, Dell has been standing in the shadow of Apple’s Macs, and not even the company’s new XPS line has changed that. Dell, in other words, is a decided underdog with significant work ahead of it just to have its XPS line viewed as a credible competitor to Apple. However Azor doesn’t view that as a major issue and accepts that Dell needs to work hard to reach its goals.
“We’re of the attitude that we’re the underdog, we never think we’re winning, and never rest on our laurels or take our successes for granted,” he says. “We’re already working on the next version of all of this stuff and the next version beyond that.”
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