Dell Lawsuit Highlights Broken PCs, Dirty Business Dealings

dell circuits

Lawsuits are looming over Dell that finally, publicly confirm something that many users have known for a long time—its machines are technically flawed. Did Dell's business rest on screwing over the user, in return for quick and dirty profits?

The ongoing three-year lawsuit against Dell that seems to be the most damning yet has just taken a fascinating twist: Documents have been unsealed (and shown to New York Times reporters) that confirm Dell was knew that thousands of PCs it sold over an extended period actually contained numerous faulty electrical components. Specifically, the problem resided in the PC's low-quality capacitors, which could leak chemicals over the other circuitry in addition to failing electrically themselves. The results were unpredictable, but almost always serious. Dell employees were instructed to play down the risks in discussions with concerned users, and this resulted in business customers placing their enterprise at risk with poor hardware.

For decades Dell's was an extraordinarily successful business—one that, perhaps more than any other, drove PC prices down. The company survived the recession, numerous legal challenges, and even today it appears to be embracing the next revolution in mobile computing—the slate PC—with its highly-promising Streak device.

You may even be tempted to compare Dell with Nokia, another enterprise whose business also rests on massive sales of low-cost devices. But Nokia's failing seems to be a lack of innovation and an overconfidence that its technology can keep pace with the development of cutting-edge smartphones such as the BlackBerry and iPhone. Dell's failures, meanwhile, lie in business management, with leadership advocating unethical sales practices to keep the money pouring in. And with federal allegations of fraud and misconduct on the horizon, those profits may bleed out in a hurry.

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5 Comments

  • Powers

    Seriously, I think everyone with the slightest background in computers knows that Dell is about offering a cheap low quality product that will more than likely break in under 2 years. I drank the same koolaid as everyone else during Dell's earlier years, but after dealing with a subpar laptop with virtually no technical support offered I knew when to walk away. I humbly request anyone (even a non-dell owner) to call Dell's technical support line and see their 1+ hour phone limbo hold time. You will get to talk to "Eric" whose only advice is to restart your computer, and will have to wait north of 2 hours to speak with an educated technician.

  • winston smith

    I have used in my office about 10 Dell pc's over the years. The least I have seen on last is 5 years, using mostly the 'Optiplex' models - they have all been pretty highly reliable. At least in my own experience. But quality and/or service can change quickly in any company if they are not careful.

  • LionelGeek

    I think it's worth pointing out that this capacitor issue was one that impacted several companies in the tech industry. It wasn't unique to Dell.

    The AIT lawsuit is three years old, and the Nichicon capacitors were used by Dell suppliers at certain times from 2003 to 2005. Since then Dell has worked with customers to address their issues, and we extended the warranties on all OptiPlex motherboards to January 2008 in order to address the Nichicon capacitor problem.

    Thanks,
    LionelatDell

  • Tyler Gray

    Fair enough, Lionel. But the reason this is news now is because documents in the three-year-old case have only recently been unsealed. The case hasn't gone to trial yet. And it sheds a light on what is thought to be an exemplary computer manufacturer. Also, from the NYT story, there's this bit, which explains why this goes beyond a problem that was fixed: "According to a Dell filing in the lawsuit, which has not yet gone to trial, the contractor found that 10 times more computers were at risk of failing than Dell had estimated. Making problems worse, Dell replaced faulty motherboards with other faulty motherboards, according to the contractor’s findings."