Dell's Last Hope? Company Turns to Windows 8 Amid Plunging Sales
August 22, 2012 3:00 PM
comment(s) - last by
Tablets are only part of the problem for Dell
While Michael Dell's offspring have drawn the ire of the executive's $2.7M USD family security detail, thanks to some
picked up by "Rich Kids of Instagram", Mr. Dell himself has face equally
struggling firm's financials and sales
I. Dell Faces Tough Questions, Says Windows 8 is the Answer to Everything
says it's "no longer a PC company"
is surely performing like a company who's out of touch with consumer PC sales.
In Q2 2012, Dell, Inc. (
) fell into roughly a tie for third place with Taiwan's Acer, Inc. (
) after fast-growing Lenovo Group, Ltd. (
) booted it from its perennial second-place spot behind Hewlett Packard Comp. (
). That sales fall resulted in a 22 percent plunge in consumer sales revenue and 8 percent overall revenue drop, despite a good quarter for the enterprise unit.
Michael Dell's company has stumbled into a tie for third place. [Image Source: Forbes]
But CFO and senior VP Brian Gladden is convinced Microsoft Corp.'s (
) Windows 8 will bail out his chief's struggling firm. He commented to investors in
You'll see new Windows 8 ultrabooks, all-in-one tablets and converged devices in the fourth quarter and headed into next year.
It's not clear what Dell means by "all-in-one" or "converged devices", but he was probably talking to hybrid tablets -- tablets with a keyboard (which may or may not be removable). Also unclear is exactly how Dell plans to differentiate itself from its rivals; Lenovo, HP, and Acer are
pushing Windows 8 product
Dell thinks Windows 8 will be sweet salvation. [Image Source: Storage Look]
II. Editorial Blasts Dell as "Done"
In an editorial
magazine staffer Farhad Manjoo writes "Stick a fork in it: Dell is done."
The opinion columnist comments that Dell is suffering an "existential threat", continuing:
However ugly your life gets, just try to put yourself in Michael Dell’s shoes. Imagine what that’s like. Picture yourself at the helm of a company that rakes in $60 billion in annual revenue — and then watch the money evaporating, floating away on a post-PC cloud. You built this company on the theory that computers were a forever-business, that the world would never fall out of love with the PC, and that you would be the guy to supply their fix.
The tragedy is that you were right: The world will never fall out of love with the PC. The PC is still riding high, the PC will be bigger than ever. What blindsided you is how the word “personal computer” would come to be redefined.
The overall premise of the column is that the rise of the tablet is killing Dell. Mr. Manjoo mocks Dell's sales chief's nebulous remarks on his company's
from earlier this year, in which he stated, "We have a roadmap for tablets that we haven’t announced yet."
While the criticism may be fair, it's equally important not to neglect that Dell is also failing in
PC sales -- a topic Mr. Manjoo surprisingly overlooks.
Tablets, like the ill-fated Dell Streak, are only part of the problem for Dell. [Image Source: Engadget]
Looking at Gartner, Inc.'s (
and the IDC Group
for Q2, one company that jumps out is ASUSTek Computer, Inc. (
) who stole the crown for fastest growth from Lenovo (who continues to grow pretty fast itself). ASUSTek -- which has a stable of
drool-worthy Windows 8 laptops, tablets, and hybrids
waiting in the wings -- grew at a 40 percent clip on a year-to-year basis. A few more quarters like that -- and a few more quarters like Dell's -- and the U.S. PC giant may find itself in fifth place in global sales.
That would be a stunning fall for Dell, which vied for the top spot in global sales for so long.
It's clear tablets are only the start of Dell's problem. From
shady sales tactics
floundering web presence
, the problems at Dell are numerous across the board. Dell may look to Windows 8 for salvation, but its failure to execute with current generation designs, inspires little faith that it will be able to execute in the next generation Windows era.
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RE: Where was Dell...
8/23/2012 1:06:04 PM
Ya, I am not sure what that meant either. I am a network admin, and believe me MS dominates the server market, by a landslide and its not going to change any time soon. There is no way a Linux distro will get the product support and app support that MS provides. MS isn't going anywhere.
I do get his point in the consumer market that Win8 wont go over too well... But MS does that. XP, awesome (at the time) Vista, flop. Win7 Awesome. 8, probable flop. Win9, will fix whatever problems Win8 caused, whether bugs, UI, customer perception, or otherwise. It's how MS operates, and they have time and money to get it right.
RE: Where was Dell...
8/23/2012 1:34:35 PM
I actually think WIn8 is going to launch bit of a consumer revolution for MS. Us techies don’t like the missing start button, which has its merit, but the average consumer couldn’t handle the start menu’s complexity anyways.
I know that any time I help my computer illiterate friends with things, I’ve had the most success by adding desktop shortcuts to whatever interests them. Start – Pictures is too hard for some people – but add a shortcut to the desktop and I never hear from them again.
I think Metro’s going to be a huge hit in the consumer space. I personally can’t wait to be able to access my home server’s media library from my Win8 phone or Slate. Things I can’t do with an Android or Apple device. Microsoft suddenly has a whole line of products that will integrate with each other seamlessly. Something Android can’t touch, and Apple demands you hand everything over to iTunes to do.
RE: Where was Dell...
8/23/2012 3:11:12 PM
"I actually think WIn8 is going to launch bit of a consumer revolution for MS. Us techies don’t like the missing start button, which has its merit, but the average consumer couldn’t handle the start menu’s complexity anyways."
That is a very good point. Most of the people complaining about the UI are us techies. Most people just want to point and click and have it work without having to need to call for help from a techie (we can be quite annoying).
"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller
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