October 6, 1997: Michael Dell makes an incredibly bleak appraisal of Apple’s fortunes, uttering a quote that will become notorious. Asked what he would do with the struggling company, the founder of Dell Inc. says he would “shut it down and give the money back to the shareholders.”
As incorrect forecasts go, this ultimately will go down as one of the more notable in tech history. But it doesn’t seem that way at the time.
Michael Dell quote on Apple: ‘Shut it down’
Sometimes even the tech industry’s smartest people prove spectacularly bad at seeing what comes next. In 1997, Michael Dell had plenty of reason to think Apple was finished. The company was hemorrhaging money, its product strategy was an utter mess, and Apple co-founder Steve Jobs had just returned to the company he’d been forced out of a decade and a half before.
What Dell didn’t know was that Apple was standing at the edge of one of the greatest turnarounds in business history — and his throwaway remark would become a perfect reminder that even industry giants can mistake a company’s darkest moment for its final chapter.
To give Dell the benefit of the doubt, he’s a smart guy. Only in his early 30s at the time of his infamous quote — making him a decade younger than Jobs — the pioneering entrepreneur had already made billions selling built-to-order PCs directly to consumers.
Apple, by contrast, had just announced its biggest losses in history. Cupertino also had just seen its clone Macintosh strategy, which many thought would save the company, misfire spectacularly. Sure, Jobs was back in Cupertino running things again, but he hadn’t fared too well with his non-Apple company NeXT. And all Jobs had to show for his return as Apple CEO was a new advertising campaign — minus any actual new products.
Dell’s comment, which came during a talk at a Gartner Symposium, struck a nerve with the recently returned Jobs. Apple’s new CEO took time out of his next keynote to respond to Dell’s “rude” comment.
“We’re coming after you, buddy!” Jobs said.
Softening a notoriously bad take
Years later, Michael Dell walked back his infamous quote about Apple. During a Q&A at TechCrunch’s Web 2.0 Summit in 2011, which you can watch below, Dell “clarified” his earlier comment, saying he only suggested he would close shop at Apple because he was so dedicated to running Dell at the time.
Ironically, Dell’s dismissive 1997 quote about Apple came just as Cupertino prepared to engage in an epic turnaround. In fact, Apple became profitable again the very next year.
The company roiled the computer industry with the original iMac, which launched in 1998. Then Apple followed that hit with the iBook laptop in 1999, the iPod in 2001, the iPhone in 2007 and the iPad in 2010.
Apple’s Dell-like strategy of selling computers over the internet also turned out pretty darn well. Today, Apple’s market cap sits just south of $5 trillion, making it the second most valuable publicly traded company in the world.
Do you remember the Michael Dell quote or other notorious Apple doom predictions? Leave your comments below.
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
10 responses to “Today in Apple history: Michael Dell says he’d shut down Apple”
The iPhone in 1997 lol.
Thanks. Corrected.
Cool, just found it funny, no worries. Reading the dates from 1999, 2001, then 1997, 2010…wait something wasn’t right.
Ahead of it’s time (literally) :-)
Thought the same thing lol
My favorite is still the infamous interview of Steve Balmer dismissing the then-new iPhone for, among other things, not having a physical keyboard, which, according to him, was a deal-breaker for business users. So much hubris packed into just a few minutes, including him touting Windows phone’s sales numbers as ipso-facto evidence of its inherent merits and quality. He often did so when defending the latest version of Windows: “we’re installed on 90 percent of the world’s computers…”
I’m sure he ran MS the way he thought best for shareholders, but a visionary he was most certainly not. He was a textbook example of Steve Jobs’ adage about how some companies go from being run by the engineers to being run by the salesmen. The iPhone is, to me, a perfect example.
Time for some delicious crow pie.
He was about to be very miffed when Apple killed Dell’s Mac clone license.
I remember Steve Jobs mentioning Dell’s quote a few times in his product announcements, saying we are now 4x the size of Dell…10x the size of Dell, etc. Big fun, always, to hear it.
Right, Michael, that’s what you meant…