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Dell lawsuit docs reveal it consciously sold defective PCs

updated 06:05 pm EDT, Tue June 29, 2010

Dell lawsuit reveals 12m Optiplex PCs were bad

Newly unearthed documents from a lawsuit filed three years ago against Dell have today confirmed that the company was aware of and continued to sell flawed PCs. About 12 million OptiPlex desktops between 2003 and 2005 shipped with mainboards capacitors that, according to e-mail messages, Dell employees knew would fail within three years. Staff were told to avoid acknowledging the mainboards were bad and downplayed breakdowns, even when batches of 1,000 or more PCs (including those of its eventual legal defense) failed at the same time.

The stalling went so far that Dell at one point accused Internet service firm AIT of simply working the systems too hard in a tight space, according to the New York Times. Dell openly tried to upsell AIT to more expensive systems rather than fix or replace the affected systems.

Dell eventually admitted to the issue and in 2005 set aside $300 million to mend and replace computers, although it tried to downplay the effects by saying the capacitors didn't cause data loss or pose a safety risk. Many affected companies did, however, complain that they lost millions of dollars of business as they were suddenly forced to repair or replace systems all at once.

The problem wasn't unique to Dell and did affect system builders such as Apple and HP. Producers of stand-alone mainboards like ASUS and MSI were also affected. Most of these, however, were more active in addressing complaints and either fixed systems more proactively or started extended repair programs sooner.

Dell's supply chain has also been blamed for some of the faults. Its system, which is still in practice today, relies on a just-in-time assembly process that lets it get cheaper parts as they become available. While leaner and more profitable, it exacerbated the problem by leaving Dell with no easy solution to getting alternative mainboards where other companies could swap them out sooner.



By Electronista Staff
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  1. que_ball

    Fresh-Faced Recruit

    Joined: Aug 2000

    +2

    I had that problem

    I experienced these failures on several Dell optiplex 270 systems. But my experience with Dell doesn't match the article.

    They dispatched a tech to replace the parts the next day.

    They never gave me any hassle getting things fixed. Just called and a guy showed up the next day with a new motherboard ready to install it. Maybe it's just in the USA where they were hiding the problem but Dell Canada phone support and on site techs all knew about it and had no problem fixing it.


  1. Makosuke

    Forum Regular

    Joined: Aug 2001

    +2

    Lawyers

    Not exactly surprising, but I like that the legal firm was complaining about a massive number of failures on the exact same issue they were defending Dell on.

    Now, in fairness, it's possible that they're defending Dell from what they believe is an unreasonable lawsuit for a problem Dell addressed. It's also possible that they, like most civil lawyers, are soulless creatures driven entirely by greed and malice, and see no contradiction in taking money to defend a company from, in effect, yourself.

  1. facebook_Dale

    Via Facebook

    Joined: Jun 2010

    +1

    Bad Motherboards

    This isn't a surprise. The whole of the computer industry sold computers with the bad capacitors, including Apple, but it was more prevalent in the PC industry. The caps of the capacitors would bulge then blow completely. The reason for this was a bad formula used for making the capacitors by the various Taiwanese companies. No company was spared. Apple wasn't happy about owning up to the problem since they make "perfect" computers. As a computer tech, it took me two months to get Apple to warranty a whole school full of eMacs with bad boards. They had me test and re-test the eMacs when all you had to do was open the access door and look at the capacitors. There are still a few computers out there with these bad boards.

    As for Dell, they were going thru bad times and should of owned up earlier. They made the bad times only worse. But at least they could've pointed to it being an industry wide problem

  1. LionelatDell

    Fresh-Faced Recruit

    Joined: Mar 2009

    -2

    Perspective from Dell

    Glad to see that one of your readers chimes in that we're supporting our customers.

    As some of your point out... this was an industry issue, not specific to Dell.

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

    Thanks,
    LionelatDell

  1. Paul Huang

    Mac Enthusiast

    Joined: Sep 1999

    -9

    Apple does the same thing

    MacBook plastic s. junk is a prominent example. Replacement parts have the same flawed design.

    Here's the story:

    http://www.independent.co.uk/news/business/news/stolen-formula-for-capacitors-causing-computers-to-burn-out-539299.html

  1. Mr. Strat

    Forum Regular

    Joined: Jan 2002

    +2

    Still a lot on campus

    We still have a lot of Optiplex 270s and 280s on campus. The 270s were the worst, but they're all way out of warranty now.

    Comment buried. Show
  1. Feathers

    Grizzled Veteran

    Joined: Oct 1999

    -16

    Change Title

    The heading should read that the documents "confirm" that Dell knowingly sold faulty computers, it was already suspected that they had done as much, so nothing was actually revealed. I think the article should give more prominence to the fact that other manufacturers including Apple were equally guilty and went to greater lengths for longer periods of time to conceal this fact. Finally forced into it, Apple's extended warranty on G5 power supplies only expired this January after many hundreds of Powermac PSU's "popped". As a matter of information, the G5 Powermacs were the least reliable desktop computers in the entire industry in 2004-2005. Of course, MacNewbs simply can't accept that Apple has an extremely chequered manufacturing history. 2003 iBook G3 anyone?

  1. nat

    Junior Member

    Joined: Mar 2002

    +16

    feathers

    "Apple were equally guilty and went to greater lengths for longer periods of time to conceal this fact."

    you have some proof of that, or are we supposed to just buy it because you managed to type it out?
    you know, some kind of fact to go along with it? the article is about not only knowing about it but actively trying to deny it. you got something like that to offer or is simply being a "hate all things apple" simpleton enough for you?

  1. chas_m

    Joined:

    +10

    Feathers = libel

    Yeah, unless you've got documentation that Apple acted in the same manner as Dell (knowingly lying about and covering up the issue), you'd probably be wise to retract/delete that statement unless you really want to get to know your lawyer a whole lot better.

    Comment buried. Show
  1. Paul Huang

    Mac Enthusiast

    Joined: Sep 1999

    -14

    I have plenty of documentation

    @ feathers

    Too many Apple fan boys here. Before Apple finally couldn't take the heat anymore and announced that 'As of December 15, 2008, this program is now closed', I made a rash of phone calls in October and November on behalf of dozens of people.

    Initially, AppleCare agents—while fully aware of the problem—treated iMac G5 owners like idiots. They said: 'this is the first time I have heard of this' or 'we have not had any cases like yours'. To this day, they are still concealing the fact by saying 'a result of a specific component failure within the computer's power supply'.

    Apple likes the mushroom method: keep them in the dark and feed them sh*t.

    Wake up and smell the road apples.

    http://www.apple.com/uk/support/imac/repairextensionprogram/

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