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Dell Knowingly Sold 11.8m Faulty PCs

Gordon Kelly by

Dell Knowingly Sold 11.8m Faulty PCs

Now here's a legal hornet's nest...

According to the New York Times, Dell knowingly sold 11.8m OptiPlex PCs between 2003 and 2005 which had a 97 per cent failure rate. Worse still, the paper alleges that their inherent fault (bad capacitors) could cause fires and Dell - so desperate to save money - ignored the problem, told support staff to play dumb and even refit some affected machines with the same batch of dangerous components.

Yes it's a stunning revelation and only becomes public since documents from a three year old lawsuit were recently unsealed. Dell spokesman Jess Blackburn told the NYT the company is unable to comment on past or pending litigation, something it had hoped to resolve after taking out a $300m charge to fix or replace the affected computers in 2005.

Given the nature of these revelations and the on-going legal issues we'll let you make up your own mind on this fascinating story, but it is safe to say a high volume, low margin business model is always a pressure environment. I suspect this story will run and run...

In related computer problems Sony has dismissed the Wall Street Journal's report that it is about to recall over 500,000 Vaio F11 and CW2 laptops because of overheating. Sony does acknowledge the issues, but said they can be fixed with a simple firmware update (link below).

Dell must wish it's problems were so easily solved.

Sources:

NYT

Sony Vaio Bios Update

Go to comments

hankb6d

June 30, 2010, 10:28 pm

Shame some computer newbie is going to think the sub 3.2ghz Dell on Ebay from a stoned Polish dude surfin up in Cornwall is going to be safe from fire. The capacitors refuse to go away, so did Dell beta test this stream model for MS and the Xbox 360? I never heard of a huge recall from Dell, but my memory is on a par with a Dell box circa 2003.

jake120

June 30, 2010, 11:31 pm

This is just another example that in big corporations it is not about what is right or wrong it is about what they can get a way with. The issue here is that it could cost a person his or her life not to mention property damage.

beardybuck

July 1, 2010, 12:57 am

I'm more amazed that people are surprised.

RazorA

July 1, 2010, 1:00 am

In many ways I'm not surprised by this revelation. Although I expected some of their laptop ranges to be reported instead of their desktops. Some models have been known to be of substandard quality. Just type Inspiron 1525 battery problem into a search engine.

Martin 6

July 1, 2010, 2:35 pm

I seem to remember a Lot of a hoo-ha about ASUS as well as more than a few other Motherboard manufacturers not to mention MSI (who made a lot of OEM boards for Dell) having problems with caps around this time, we even bought 10 ASROCK boards with different caps than the ones on Gigabyte GA-7DXE motherboards were failing almost to the day at 18 months of use.





It does not surprise me that this happened about that time all motherboards were using those cheap caps to keep the prices so low.





The old saying goes "you get what you pay for"

xbrumster

July 1, 2010, 3:40 pm

sh*t, I got two of those SFF machines from ebay. They havnt caught fire yet, but the psu does get very hot after long use.

Carl Abudephane

July 1, 2010, 8:08 pm

Replace the word 'Dell' in this report with the word 'Apple', and there would now be roughly 157 comments. That is all it takes to get 'em crawling out of the woodwork.

Jesper

July 1, 2010, 11:45 pm

Shocking story indeed. But I am not sure if it is fair to judge a company who took the beating five years ago, and made the bad decisions seven years ago.


I bought a Dell laptop two years ago (a XPS M1330, after a wholeheartedly recommendation from Andy), and it is a fine laptop. But it was also born with an error. It made the graphics chip overheat, and after one year it broke down. From my first call to customer service and until a technician showed up on my doorstep, it took five days.





I was very pleased with this experience, but I am afraid I will not experience such good service again, not from Dell nor any other consumer electronics company.





I guess my point is. Dell (hopefully) learnt its lesson five years ago. To me, this story states the obvious. Any corporation will ask itself "Do we make money by doing this?" and "Will we loose money if we don't?". Hopefully Dell has realised they will loose money by not fixing what is broken.

b166er

July 2, 2010, 2:55 am

At the other end of the scale, we've recently been buying Toshiba laptops under the Reliability Refund Guarantee (promotion now finished unfortunately) which will repair AND refund the full purchase price up to 3 years from date of purchase.


Buy motherboards from EVGA (10 years)


A client of ours has a bunch of these OptiPlexes, some of which have failed (sff). Wonder if Dell will give them a credit note when all this comes out?

MrGodfrey

July 3, 2010, 5:48 pm

Jesper: 5-7 years may be a long time in business, but I imaging it's quite short in the memory of those customers who were knowingly sold these PCs. They'll avoid Dell and advise others to do the same - and quite rightly too. Only the sacking of the people who made the decisions, and clear evidence that their approach has changed, should reassure buyers.





The problem is that in addition to the two questions you mentioned, corporations will also ask themselves additional questions like "Can we get away with this?" and "Will we make more money from the sale of dodgy products than we lose in payouts to the relatively few who complain?" If they decide the answer to those questions is "yes", then you're in trouble. Companies do learn from their mistakes - but unfortunately, sometimes this just means learning how to hide their mistakes better.

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