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  (Source: TechSpins)
Dell will still devote energy to its XPS lineup

Dell, a company that rose to prominence on direct sales to customers, lean operations, and competitive prices is moving its focus away from the PC market. According to PC Pro, this revelation comes courtesy of Brad Anderson, Dell Solutions Group President.
 
"We're no longer a PC company, we're an IT company," said Anderson. "It's no longer about shiny boxes, it's about IT solutions [that let companies drive efficiencies]."

The company killed off its netbook lineup in late 2011.
 
Dell experienced record growth in its enterprise solutions and services divisions with $18.6 billion in revenue for fiscal 2012 ($4.9 billion for Q4). Revenue from its consumer unit dropped 2 percent for Q4 to $3.2 billion.
 
PC Pro also reports that enterprise solutions represent 50 percent of Dell's profits.
 
Not surprisingly, the signs that a move away from PCs was right there in the company's earnings report. “Our customers think of Dell in much broader terms now, trusting us with their comprehensive IT needs, from the datacenter to the device,” said CEO Michael Dell last week. “The expanding mix of revenue and earnings from enterprise solutions and services is critical to our future."
 
According to Anderson, Dell will still devote energy to its XPS family of PCs that have been successful for the company.
 
Rival Hewlett Packard pondered such a move last year, but new CEO Meg Whitman decided against tossing asides its PC unit. "HP objectively evaluated the strategic, financial and operational impact of spinning off Personal Systems Group (PSG)," said Whitman in late October. “It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees.  HP is committed to PSG, and together we are stronger."

Sources: PC Pro, Dell Earnings



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By TakinYourPoints on 2/27/2012 10:57:39 PM , Rating: 1
quote:
So Microsoft has greater market influence but can't make more money - which is after all the basic reason businesses operate.


It isn't like Microsoft is doing poorly. They have even higher profit margins than Apple and are still making billions off of Office and Windows (in that order). The main things holding back their net profit are sinking billions into projects that don't get off the ground, ie - $2 billion into Bing which still has yet to make a dent in Google's business. In any case, Office and Windows make so much money that they can still grow annual revenue with those losses.

They still manage to grow their business year over year, it is just that their growth isn't what it used to be since their ceiling as a software company is currently much lower than the ceiling is in mobile devices. Mobile is a product category that has a LONG way to go towards saturation, while desktops reached that point years ago.

I don't see it as a "versus" thing, Microsoft makes good applications. They are making loads of money off of Android licenses, not to mention selling their own iOS applications for iPhone and iPad. Office is set to release soon on iPad. They can easily clear over half a billion dollars in only the first few weeks if you figure that it comes out at $30 for the suite and it sold on 20 million iPads out of the existing ~60 million (and still rapidly growing). Microsoft is tapping into the huge iOS ecosystem and stands to make more net profit from it than even their own XBox 360 line, which is pretty impressive.

In any case, Microsoft's back end or desktop software isn't going away anytime soon, they're doing very well developing for iOS, and hopefully Windows Phone 7 will gain traction at some point (it certainly deserves to over Android). Microsoft will keep operating as a very profitable software company, nothing to mock IMHO.


"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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