updated 05:25 pm EDT, Tue August 16, 2011
Dell Q2 2011 shows effects of iPad, economy
Dell on Tuesday epitomized the tough conditions for Windows PC builders with flat results and a poor outlook. Its overall revenue, as well as its home and large business PC revenues, were up just one percent over a year earlier. While its net income was up 60 percent to just over $1 billion, the company warned that its summer performance would be flat and lowered its growth expectations for the whole year, down from five to nine percent to just one to five percent.
The company credited what upward movement it had towards enterprise-grade hardware, such as servers, networked storage and pure services. It was mum on explanations for its home computer sales. Its lowered expectations were based only on "strategic decisions to redirect resources from lower- to higher-value solutions" as well as a "more uncertain demand environment."
Dell may be one of the more direct victims both of economic difficulties but also of Apple. In the US, its PC shipments dropped over 10 percent, making it the only company to drop sharply besides Acer. Worldwide, it grew less than three percent and again was second only to Acer in poor performance.
The Texas PC designer was one of the quicker companies to escape netbooks but has developed a heavy emphasis on low-end notebooks that might have hurt its prospects. A shift to the high end has only come back more recently with systems like the XPS 15z that, in its case, is deliberately intended to chase after Apple's computer aesthetic. Dell hasn't fared well in tablets, though, and sells only a modest amount of the Streak 7 as well as its niche-only Latitude tablets.