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Dell Bets Splashy Design Will Sell Its New Laptops


Dell Design Chief Ed Boyd is transforming those once-stodgy PCs with art and color. Can made-to-order laptops revitalize the computer maker?

Hanging on a wall at Dell's (DELL) consumer design lab in Austin, Tex., are neat rows of what look like abstract paintings. There's a splashy watercolor in turquoise, black, and green, and a mosaic pattern of white and red dots and geometric shapes. Another is covered with hand-drawn sketches of olives in green, purple, and orange. These aren't works of art, though. They're dozens of prototypes for future laptops. Look closely and you see the Dell logo on each one.

The man behind this effort is Ed Boyd, one of Dell's most unusual hires in recent years. Boyd is an industrial designer who used to dream up new sunglasses and shoes for Nike (NKE). Now the 43-year-old is trying to make design an integral part of Dell, the personal computer maker long known for cranking out boring gray boxes. "I was skeptical it could be cool," says Boyd, who joined the company last year. "I took the job when I heard the design lab would function like a startup for consumer [products]."

LET THE BUYER DESIGN

Dell plans to roll out the first three laptops with these colorful designs on Nov. 11, in time for the holiday season. Customers will pay an extra $75 for the designs, on top of the basic $699 price tag for the company's budget-line portables. The designs are from Nigerian painter Joseph Amédokpo, South African graphic artist Siobhan Gunning, and Canadian designer Bruce Mau.

For Boyd, this is just a start, though. Next year, Dell will let buyers customize laptops in a dizzying number of ways, mixing scores of colors, patterns, and textures. The options will go far beyond the handful of choices available from most of its rivals. In essence, Boyd is taking the Nike approach of letting people design their own sneakers, and trying to apply it to the world of computers. "We're pushing the idea of [made-to-order computers] to the next level," says Boyd.

Dell could certainly use a change in fortune. The once-mighty PC maker has stumbled in recent years: Its stock is off by more than 60% since 2005. Even after founder Michael S. Dell returned as chief executive in 2007, the company continued to lose ground to Apple (AAPL) and the resurgent Hewlett-Packard (HPQ). "We had higher expectations for Dell's turnaround by now," says Clay Sumner, senior analyst at FBR Research (FBR). Dell's market capitalization is now $24 billion, compared with $93 billion for Apple and HP's $87 billion. The net cash on Apple's balance sheet is about the same as Dell's market cap.

Michael Dell contends that the company is making progress. He says Boyd's efforts have helped Dell get back on track, particularly with consumers. "We've got the most exciting new products ever from Dell coming in the second half of this year," Dell said during a speech in June. "That's fundamentally what brings new customers in."

RISKS AND REWARDS

Still, Dell's timing is awful. With the economy headed into recession and consumers cutting back, it will be difficult to charge any sort of premium for cool design. Analysts say that's especially true for companies such as Dell that don't have an established reputation for design. "Price will be more important for consumers because of the economic deterioration," says Mika Kitagawa, an analyst with the market research firm Gartner (IT).

Boyd is used to taking risks. Last year he hired an obscure graffiti artist named Mike Ming to create images for Dell products, a move that worried some of Dell's straitlaced staff. He also signed off on an undersized keyboard for Dell's first mini-notebook PC, a decision the company's founder clearly disagreed with. "Michael Dell wanted the full keyboard experience," says John Thode, Dell's vice-president for small consumer devices.

Then the sales figures for these products started coming in. A limited edition laptop designed by Ming and the mini-notebook, released in recent months, both exceeded expectations, company executives say. "I got an e-mail from Michael saying: 'Keep going, going, going,'" Boyd says.

Boyd's design staff has now grown to 120 people scattered from Austin to Miami to Singapore. There are a dozen PhDs in the group, whose degrees include engineering, computer science, and cognitive psychology. Besides new products, they're working on such cost-saving packaging as an inflatable cushion made from recycled plastic. They're also trying to overhaul the online shopping experience at Dell.com by, among other things, moving to replace choppy point-and-click navigation with more fluid scrolling through images. "Design isn't just cosmetic," Boyd says.

Last year, Dell tried offering consumers the choice of a dozen different colors for their laptops, but the company couldn't deliver the computers as speedily as promised. The delays angered customers and sparked numerous critical blog postings and news reports. Boyd says Dell will be prepared this time as it tries to deliver an even more complicated mix of designs and colors.

Rivals will be tempting consumers with their own new designs. Apple has just unveiled a line of sleek laptops, made from a single piece of aluminum. The toughest competition may come from HP, which has been investing in design much longer than Dell and used that edge to surpass Dell as the world's No. 1 personal computer maker two years ago. This fall, HP is bringing out a touchscreen PC, the thinnest laptop on the market, and a $700 mini-notebook with a red-and-purple peony design from fashion designer Vivienne Tam.

These sorts of products may be a tough sell this holiday season. But if Boyd and Dell keep investing in design, they may ultimately find a more receptive audience. "People want gadgets that look cool on campus or in a café," says Gartner's Kitagawa. "Customization will be more and more important. In the long run, it's the way to go."

Business Exchange: Read, save, and add content on BW's new Web 2.0 topic network

How Apple Does It

While Dell (DELL) is newly focused on design, Apple (AAPL) has set the standard for the computer industry for years. In Do You Matter? How Great Design Will Make People Love Your Company (FT Press, 2008), Robert Brunner, Apple's former director of industrial design, provides an inside look at how the company approaches design. There's advice from Apple's current design chief, Jonathan Ive, as well as four lessons from Brunner's years leading the effort: support design at senior levels; design for more than decoration; be original; and launch products quickly and often.

To read a review of Brunner's book, go to http://bx.businessweek.com/product-design/reference/


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