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Dell's profit fell 47 percent to 39 cents per share while revenue dropped 11 percent to $13.7 billion

Dell's financial report for the third quarter seems to have missed the targets predicted by Wall Street on many levels due to sluggish PC sales.

For Q3 2012, Dell's profit fell 47 percent to 39 cents per share while revenue dropped 11 percent to $13.7 billion from a year previous (Wall Street expected $13.9 billion). Its net income fell from $893 million (49 cents per share) in Q3 2011 to $475 million (27 cents per share) in Q3 2012.

A large reason for Dell's financial tumble is the lack of demand for PC upgrades. Dell's PC shipments fell 8.3 percent in Q3 2012 from a year earlier.

“In a difficult global IT spending environment we saw solid proof points that demonstrate progress in our strategy,” said Brian Gladden, Dell CFO. “A highlight has been the strong progress of our newly introduced servers, with our server and networking business up 11 percent. We’re also encouraged by early interest in our new Windows 8 touch portfolio and the opportunities it creates for our commercial and consumer businesses.”

Looking forward, Dell predicts a fourth quarter revenue of $14 billion to $14.4 billion, which is a bit less than the $14.5 billion analysts were shooting for. In Q4 2011, revenue was $16 billion.

In response to all of this disappointing news, Dell stock dropped to $8.81 this morning, which is the lowest its been since March 12, 2009.

While Dell is looking to Windows 8 for some kind of revival, the new operating system hasn't provided any immediate boost for PC makers. In fact, Gladden said Windows 8 wouldn't affect Dell's financial results for the next two quarters.

"The client business continues to be challenging," said Gladden. "Commercial customers tend to be lagging adopters of a new operating system. They're going to wait."

To make matters worse, Microsoft doesn't solely depend on PC makers for hardware anymore. Last month, it released its first tablet hardware, Surface RT, which features the RT version of the Windows 8 mobile OS. Next year, Microsoft plans to release the Surface Pro, which will run Windows 8 Pro.

Source: Dell

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RE: Windows 8 the savior ???
By StevoLincolnite on 11/17/2012 1:12:07 AM , Rating: 3
Allot of people I know are still happy with their old Core 2 Duo's/Athlon X2's and integrated graphics with 2gb of ram.
They just don't see any need to upgrade as it handles all their facebook needs with ease.
Plus it doesn't help that the entire developed world minus a few countries like Australia had/having massive financial woes which makes the idea of spending hundreds on a new machine a tough pill to swallow for allot of people.

Heck, allot of gamers I noticed are still running with heavily overclocked Core 2 Quads because games just aren't that demanding with the majority being merely console ports.
Sure you might need a new GPU every few years...

Seriously, take a look at the Steam hardware survey, 50% of gamers are still using a Dual-Core processor, 40% are using Direct X 10 graphics cards still and the average Ram amount per machine is 4gb.
Which consequently other than a couple of demanding games like Battlefield 3 or Crysis will handle everything, albeit in some cases with some graphics options lowered.

RE: Windows 8 the savior ???
By TakinYourPoints on 11/17/2012 2:48:16 AM , Rating: 3
I've been on an i7 860 for three years and I have very little pressure to upgrade, especially after getting a GTX 680. I'm going to go Haswell next year just for the heck of it, mainly because my gut tells me I'm supposed to upgrade every 18-24 months like how I always have...

The only reason I'm going GTX 680 is because I have a 1440p monitor, otherwise I'd have as little pressure to get better video like the examples you brought up.

RE: Windows 8 the savior ???
By haukionkannel on 11/17/2012 5:58:59 AM , Rating: 2
Exactly! To most people computer have been fast enough for many years so there is not any reason for them to upgrade! That is allso reason for pads to become so popular because most things that people do can be done with pads.
For gaming and video editing etc there are not fast enough computers in the market, but Joe Average is just fine with core2 or even slover machine. And when economy is what it it at this moment... well the peoples starts buying new machines when the old brokes down... and they will buy small and cheap mobile computers.

RE: Windows 8 the savior ???
By TakinYourPoints on 11/18/2012 12:31:55 AM , Rating: 2
Perhaps the next console generation will push for better PCs. Sadly, one reason why the need for faster hardware has stagnated is that consoles are the primary target platform, thus lowering the ceiling for required hardware.

That's only one thing, of course. Envelope pushing games don't really sell anymore, just look at Crysis. It isn't like 2000 where people would go out of their way to get faster hardware to play Quake 3 very well. The most successful companies like Valve and Blizzard target a very wide range of hardware now, and the most successful game at the moment, League Of Legends, runs on pretty much anything.

I dunno, maybe the next console generation will push the PC end forward, but there's still a lot to be said for PC games that target a very wide range of hardware. Developers want to make money and the model of initial $50-$60 purchases is falling aside as free-to-play/microtransaction and subscription models take over. Volume matters most in that case, which means not going after uber-hardware. We'll see.

RE: Windows 8 the savior ???
By rdhood on 11/19/2012 12:23:42 PM , Rating: 2
Seriously, take a look at the Steam hardware survey, 50% of gamers are still using a Dual-Core processor, 40% are using Direct X 10 graphics cards still and the average Ram amount per machine is 4gb.

That was/is me. I have one dual core intel processor (Core 2 Duo 4300) left still running (since 2006/2007). I replaced an E6300 about two months ago when the motherboard stopped booting. I replaced it with a 6 core AMD Phenom 1045 + mother board and 8 GB of memory.. all for under $135.

The Core2Duo processors were the first bunch of processors that I never upgraded just to upgrade. They are/were powerful enough to hang onto until the MB/Processor died in some way. Still, they are plenty powerful enough to run Windows 7, and their replacements (in my case, AMD Phenom 6 core processor) are 5x the performance for a very minimal upgrade cost.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
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