Dell hurt by Acer, corporate fears

Dell today posted disappointing results for its latest quarter ended in October. The company saw its year-over-year revenue drop 15 percent to about $12.9 billion and its net income drop even further, falling 54 percent to $337 million. Both decreases were blamed on poor results both in the public sector and in its staple home PC business, where its shipments were up about 17 percent compared to a year earlier but its revenue was down 10 percent, an indication that many buyers were opting for less expensive PCs.

The revenue was significantly below analyst estimates that had expected Dell to generate $13.2 billion.

Dell itself is optimistic as it notes that it saw a small turnaround in its small/medium business and enterpise segments, all of which form the most important parts of its business. It expects Windows 7, which launched only at the very end of the quarter, to have a much larger impact in its November-to-January quarter as home customers, as well as smaller businesses, to buy PCs where they might have otherwise held off.

The Texas-based PC builder has been particularly hurt by recent circumstances for both the economy and the computer industry as a whole. This past quarter, it saw Acer pass it by in world market share as the Taiwanese firm's stronger focus on budget PCs, especially netbooks, gave it the edge. Also, corporate hesitation to adopt Windows Vista led to many companies avoiding their usual upgrades through Dell. Resistance to Vista at home has also partly hindered Dell's sales until now.

By Electronista Staff