updated 09:40 am EDT, Fri May 29, 2009
Dell Income Drops 63pc
Dell late yesterday reported bleak results for the first calendar quarter of 2009 that showed it faring poorly in the economic climate. The Texas PC builder's net income dropped a full 63 percent from the same quarter a year ago to $290 million and was hurt primarily by rapidly shrinking business sales in the world economic collapse. Large, enterprise-level business revenue fell a significant 31 percent, indicating a steep drop in PC shipments, and was nearly matched by a 30 percent drop in small- and medium-sized business revenue.
In its regular home PC business, the company produced mixed results: although its actual unit shipments were up by 12 percent, its revenue from these sales declined by 16 percent. The discrepancy reveals a shift towards lower-cost PCs, though Dell doesn't say whether the decrease stems from its growing netbook line or simply from sales of lower-end models in its regular line. Some of Dell's key introductions in the period were for high-end systems, including the Adamo 13 ultraportable and the Studio XPS 435.
The company declined to detail the number of PCs shipped. To address the problem, it says it's continuing cost-cutting efforts and also expects a large amount of PC replacements in the corporate world later on in 2009 with the releases of Windows 7 and Windows Server 2008 R2 towards the end of the year.
Dell's performance stands in contrast to immediate competitor Apple, whose Mac shipments declined 3 percent but were countered by a year-over-year increase in income. Apple doesn't currently participate in netbooks and has a typically higher-priced lineup less sensitive to economic conditions. It also doesn't participate as heavily in the enterprise space and so isn't as subject to risks in corporate spending.