Dell hits rough patch, but is optimistic about future

By on August 28, 2009, 5:39 PM
Despite Dell's sharp decline in revenue during the second quarter, the PC maker said things are looking up. The company reported a profit decline of 23% to $472 million ($.24 per share), and 22% less sales during the May-July period. Sales to corporations fell 32% year-over-year to $3.3 billion, meanwhile consumer PC shipments rose 17% - mostly due to price cuts.

Dell's outlook is similar to other big names in the industry, including HP and Intel. They have all reported that consumers are making their way back to the stores, but corporations are still penny-pinching. Dell believes that may not change until 2010. Analysts are looking to next year for renewed company budgets and hope Windows 7 will stimulate sales.

About 80% of Dell's business comes from sales to corporations, government agencies, and other institutions. Company CEO Michael Dell expects things to look a bit brighter in the second half of the year, if the current demand trends continue. However, Dell's profits will continue to be subject to aggressive pricing and rising component costs.

Given Dell's dependency on corporate sales, rivals like HP and Acer who place more emphasis on the consumer market have fared better. HP and Acer have gained market share, while Dell has lost footing. In an effort to reduce spending and regain its ground, the company has trimmed its staff by some 9,300 and has restructured its business units.




User Comments: 5

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9Nails, TechSpot Paladin, said:

We prefer smaller white-box locally built computers over huge, customers-are-a-dime-a-dozen corporate monsters. Locally supported, humans who answer the phones, and no questions asked technical support. I also have to mention that Dell computers have zero consideration to upgrade-ability. Can't tell you how many times I've opened a donated Dell computer and couldn't add a second hard drive or expand to a 3rd DIMM stick. It's so annoying when a company saves a few pennies by limiting their design at the customer's expense. I know Dell's speech is that they've changed, but I still doubt that they are as personal and customer friendly as our local computer stores.

raybay said:

Those Dell folks can be proud of the fact that there are more working Dell computers around this little globe of users than any other brand... more than most other brands...

Not everybody has to like them, but when you think of Compaq, HP, eMachines problems, it makes you proud to be a person who repairs Dells and keeps the running.

Guest said:

As a person who repairs dell pcs for a living, I can tell you that they have a broad spectrum of pcs. Some are exactly like you mentioned (lacking upgradability) however, that vast majority of their newer systems have at least 4 slots for ram and can be easliy upgraded.

You get what you pay for and alot people cant pay for much right now. So Dell, has covered the entire spectrum for lowend throw aways to top of line XPS models.

Guest said:

9Nails,

As a person who repairs dell pcs for a living, I can tell you that they have a broad spectrum of pcs. Some are exactly like you mentioned (lacking upgradability) however, that vast majority of their newer systems have at least 4 slots for ram and can be easliy upgraded.

You get what you pay for and alot people cant pay for much right now. So Dell, has covered the entire spectrum for lowend throw aways to top of line XPS models. Dell is giving the customer what they ask for. Dont blame the company, blame the consumer for mandating the need. Dell is only doing what any other company would do...what tthe costumer wants.

Since these systems are donated, I really cant understand why your getting upset. Be thankfull that people still can donate items to help your cause in this economy. Beggars cant be choosers, right?

Phantasm66 Phantasm66 said:

Well I bought a Dell laptop last time and have never looked back. The build quality is excellent and its a fine piece of hardware. Definately getting a Dell laptop again next time.

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