Dell misses and HP backlogged. Which would you rather be?

There was a famous advertisement a few years ago about Dewar’s scotch and a broken bottle of the same on the ground. The tag line was “want to see an old man cry?” and implied the gentleman dropped the bottle and lost its contents.

There are only a few things that make me cry as the CEO of a bubbling, thriving small business. I report directly to the shareholders and if I miss on earnings, I can assure you I’ll have a private tear-filled moment in my Bainbridge Island office. Needless to say, with 6-weeks left in the 4thQ of 2009, I’m working overtime (like today, Saturday).

So it must have been raining tears the week in Austin when Dell reported a “miss” on its earnings. You can read about it here. Meanwhile, down the road in Houston and Palo Alto, HP is reporting success. And I have anecdotal evidence supporting HP’s strength.

I recently ordered a HP 301 “Netbook” to support my “guy on the go” pace. I wanted a small form-factor laptop with long battery life so I can work anytime, anywhere flat-out. I ordered this netbook over Halloween weekend. I was told it would ship “no later than” November 16th. That still seemed like a long time to wait but I’m an adult now and must learn patience. Imagine my surprise when I received a “backlog” notice that HP was delaying my shipment another two weeks. That signals a production backlog symptomatic of high demand. It’s a nice problem to have (in general) but the MBA in me knows you typically like to avoid “stock outs” and possible lost sales.

Here is the notification from HP:  Dear Harry Brelsford,

Due to production delays we will be unable to ship your order on the original estimated ship date. The revised estimated ship date for your order is 11/30/2009 or no later than 7 business days from the original estimated ship date. If you prefer not to wait you may cancel your order and receive a prompt refund by either replying to this email message with your order number or calling our toll-free customer service number at 866-288-1610 between 7:00 A.M. – 2:00 A.M. (ET) Monday through Friday or on Saturday between 10:00 A.M. and 7:00 P.M. (ET).

If we do not hear from you before we ship your order, we will assume you have agreed to this shipment delay and still want your custom PC order. We apologize for any inconvenience this delay may have caused and thank you for your patience. Following this email you will receive a HP Home & Home Office Store $50 coupon due to the delay of your order.

Did you catch the last point about the $50 coupon. My research shows PCs and laptops have a less than 1% profit margin (Wall Street journal, November 20th) and that $50 coupon on my $999 USD order just wiped out HP’s profit on my order. That is another unfortunate sign of a stock-out: concessions (just ask Boeing on its oft-delayed 787).

I end with a question for you. Would you rather be Dell and miss on earnings or HP with a backlog?

Lemme know….harrybbbbb

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4 Comments

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4 responses to “Dell misses and HP backlogged. Which would you rather be?

  1. Pingback: Dell Stock European Stock Markets Chicago Board Options Exchange | Jill's First Site

  2. Interesting about the Dell backlog. I’ve found Amazon to be shipping things earlier than promised these days. What I got from that was they are on the ball and really want my business.

  3. Bob Hood

    Save the trouble and get yourself one of those slick Toshiba netbooks with the 8+ hour battery life! Available at Best Buy for $399.

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