Dell Tries For Another Home Run Michael Dell may have mastered PC sales, but is he ready for TV? Is any PC maker? New TVs from Dell and Gateway try to make it in the pros.
By Peter Lewis

(FORTUNE Magazine) – Michael Jordan was at the top of his game--basketball, that is--when he decided that baseball would be a logical extension of his athletic skills. But Jordan struck out, never reaching the big leagues.

Now there's another Michael at the top of his game--the computer business--who sees consumer electronics as a logical extension of his business skills. After all, Michael Dell sells more LCD computer monitors than anyone else on the planet, and adding a TV tuner is not that big of a technical hurdle. So can Dell score with TVs the same way he has with PCs?

I've been scouting Dell's 30-inch, HDTV-ready, wide-screen LCD monitor, a switch-hitter that can serve as both a standalone television and a PC monitor--at the same time, if you wish. It's a bit raw in terms of industrial design, and Dell's market-share numbers in the LCD-TV world are still bush league, but for a rookie, the Dell W3000 is putting up numbers that can't be ignored, especially on the pricetag. At this writing it is $2,499, after a $300 rebate, plus free shipping.

Granted, that's still very expensive for a 30-inch television, but let's put it in perspective: Two years ago I wrote yearningly about Sharp's wide-screen, HD-capable, 30-inch LCD, which also doubled as a computer display. It cost $8,000.

That was then, this is wow: The W3000 LCD monitor doesn't just crack the $100-per-inch barrier for this size of HD-ready LCD TV monitors, it shatters it. Gateway, which was first among PC makers to expand into consumer electronics, sells a virtually identical LCD monitor for $3,000, plus shipping. Other PC companies, including Dell's archrival Hewlett-Packard, say they're going to make LCD TVs too. Until then, it's Dell vs. Gateway in the battle of computer-screens-cum-TVs.

To make it to the Show, of course, all these PC arrivistes have not just to beat one another but also to outplay the star veterans of the LCD TV market, including Sharp, Samsung, Sony, LG, and Philips.

Time out, you say. Why on earth would anyone spend even $2,499 for a 30-inch TV? After all, the picture quality on the best LCD set isn't as good as that on a flat-screen cathode ray tube (CRT) television, which costs less than one-third as much. And for a bit more money, you can buy a skinny, 42-inch plasma TV that's a better size for most home theaters.

Well, yes, the 30-inch LCD is probably too small for many suburban homes. But it's an ideal size for the kind of desktop home theater that appeals to apartment or office dwellers, or for a bedroom that may or may not double as a home office. Dell's W3000 is just four inches deep (eight if you count the screen's desktop base) and weighs less than 36 pounds. A conventional tube-style TV of the same screen size would take up almost as much floor space as a La-Z-Boy recliner.

As for LCD vs. plasma, each has its own strengths. For screen sizes of 40 inches or less, I'm a big fan of LCD. Plasma works best in rooms where you can control the light, as in home theaters. LCD is better for bright areas, like kitchens or home offices. Plasmas have brighter screens, faster response times (important for watching sports or action movies), higher contrast ratios, and the ability to show blacker blacks than most LCDs. Plasmas also cost less per inch of screen size, especially at 40 inches and up. (Samsung recently unveiled a 46-inch LCD TV that will go on sale before the end of the year for a penny less than $10,000.)

LCDs, on the other hand, use far less electricity than plasmas and are immune to the plasma bugaboo of pixel burn-in, which occurs when your kid puts The Wiggles on pause every day before going to school, eventually dooming you to a ghostly image of Wiggles on everything you watch, certainly a violation of the Geneva Convention. Most of all, though, LCDs don't lose brightness over time, as plasmas do. Once a plasma set begins fading, it can be adjusted but not fixed. LCD makers say their typical sets go 50,000 hours--roughly six years of continuous use--before the light burns out and needs to be replaced. Plasma set makers say their newest sets lose half their brightness in the same amount of time. Given the quality of TV these days, your brain will burn out before the LCD TV does.

LCDs also have a particular attraction for the PC makers. LCD TVs are, to grossly simplify things, a lot like integrated circuits. And there's a phenomenon in the circuit world known as Moore's Law, which, again simplified and applied to the LCD world, means that the LCD monitor your neighbor buys next year will be bigger and cheaper than the one you buy today.

But you will buy. And so Gateway and Dell have both rushed to the market. It's clear that neither has paid much attention to design. The Dell is basically a "separated at birth" version of the Gateway 30-inch HD-Ready LCD TV. And, with apologies to the parents, neither of the babies is particularly cute, at least compared with the LCD TVs of consumer electronics brands like Sony, which prides itself on having good industrial-design genes. In my world, a TV has to look good even when it's not on. With its fat, gold-colored bezel, the Gateway set looks out of place in the living room.

In my side-by-side tests, the Dell and Gateway sets both performed well, whether connected to a computer, a DVD player, or to a digital, high-definition cable set-top box. Their spec sheets are nearly identical too, with the exception of sound quality, where Dell has a significant advantage. Dell's speakers throw 15 watts each, nearly twice the power of Gateway's.

So between the PC players, Dell is the way to go. But isn't this like deciding who your favorite AAA player is? The real comparison--and the one Dell would prefer--is between the W3000 and TVs made by industry leader Sharp. Its LC-30HV6U 30-inch Aquos LCD TV has long been one of my favorites, despite the awkward name. The Sharp has a much better contrast ratio, better deep black and colors, and a faster response time (15 milliseconds, vs. 25 for the Dell). Slower response times cause trailing effects when, say, a Yankee home run ball sails over Fenway's Green Monster. The Dell screen is a few nits brighter. The Sharp, however, has a list price of nearly $4,000.

If the two sets were comparably priced, I'd choose the Sharp Aquos both for design and performance. But they're not, and the Dell offers the better value among 30-inch LCD TVs. When Dell refreshes its LCD TV line later this year, it could be ready for the big leagues.

A big question for Dell is whether people will be willing to shell out $2,500 for a digital TV, sight unseen. Given Dell's reputation for high-quality customer service, and the fact that millions of people have bought LCD computer monitors via the Internet and by phone, chances are good they will.

Michael Dell has certainly come out swinging in the new consumer electronics game, and it looks as if he has a hit.