Dell "No Longer a PC Company" as It Focuses on Enterprise
February 27, 2012 2:07 PM
comment(s) - last by
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
, 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]."
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.
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."
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RE: Apple rakes in the profits . . .
2/28/2012 12:41:34 PM
Apple isn't alone in making record profits...
Profit margin doesn't matter that much if you are still raking in money, and hording cash like Apple does is somewhat pointless.
It really doesn't matter what your profit margin is if your consumers never pay full price for your products (Carrier subsidized iDevices). IF people actually had to buy an iPhone outright, Apple's high profit margin on it would kill them. But the stupid device is carrier subsidized to the same cost as any other "comparable" phone. HTC, Samsung, and the like simply can't convince the carriers to pay them as much because they aren't
RE: Apple rakes in the profits . . .
2/28/2012 3:58:13 PM
Wholesale price for iPhones is actually around what they are for other high end smartphones. The difference is that Apple's cost of materials and manufacturing is pushed lower due to economy of scale and producing devices in much higher numbers than everyone else. They also use their cash pile to further drive down component prices by paying for them years in advance. They've been doing this with flash memory for years, they invested hundreds of millions in machinery for producing their aluminum casing, and the most recent example is the $4 billion to LG to produce displays for the next few years, presumably for the upcoming high resolution iPads and possibly 2880x1800 Macbook Pros.
Their operations as well as knowledge that they won't sit on unsold inventory is a huge driver for their profit margins.
"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007
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