Dell profit drops 18% as home PCs continue to take hits
updated 04:45 pm EST, Tue February 21, 2012
Dell touts record enterprise but masks PC trouble
Dell on Tuesday reported results that it touted as producing records but which signaled continued problems in its mainstay home PC business. Although its revenue was up two percent from winter a year ago to just over $16 billion, its profit was down 18 percent to $764 million. The largest drag was in the consumer group, where its revenue dipped two percent to $3.2 billion and it saw an extremely sharp 43 percent drop in operating income to $39 million.
It came in spite of record growth in enterprise and healthy performance in small business.
The Texas PC builder declined to explain the cause for the home division's drop, although it may have given away a continued iPad effect. Most of the loss was concentrated in the US, where the iPad and Apple as a whole are strongest. Revenue from everywhere else grew 10 percent, Dell said.
Dell shouldn't be suffering from an overdependence on netbooks, having almost completely quit the category aside from niche models, but its emphasis on low-end notebooks has still left it stalled in PC share where Apple has been gaining. Most of its hopes for 2012 are focused on both enterprise as well as a partial shift towards the higher end through PCs like the XPS 14z and XPS 13.
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The iPad effect has barely started
Re: "The Texas PC builder declined to explain the cause for the home division's drop, although it may have given away a continued iPad effect."
You might as well have said "The blacksmith declined to explain the cause for the horseshoe division's drop, although it may have given away a continued automobile effect."
The iPad effect is barely starting. And Apple is poised to continue dominating the next wave of personal computing: pad computing. Sure, people still ride horses. Maybe Dell can take comfort in that knowledge.