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  (Source: greenrightnow.com)
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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By Tony Swash on 11/18/2012 3:14:09 PM , Rating: 2
quote:
It isn't really about needing a computer but about needing a new computer.

The computer they have is "good enough" so instead of buying new ones people spend there money on "toys" (tablets).


Go back to the dawn of the PC era and you would have heard this:

"It isn't really about needing a minicomputer but about needing a new minicomputer.

The minicomputer they have is "good enough" so instead of buying new ones people spend there money on "toys" (Personal Computers)."


It's not that the minicomputer disappeared or that there are aren't people making money selling them it's the fact that minicomputers just don't impinge on people's lives, they are necessary but not very interesting or relevant to the vast majority of people using computers. SuchI think will be the fate of the PC in the medium term, I think Microsoft know that and hence the desperate gamble that is Windows 8, an attempt to contain the disruption of the PC markets and to create a migration path for Microsoft as a business into the new device markets. I think all W8 will achieve is to hasten the disruption of the PC ecosystem and, from Microsoft's point of view, not in a good way.


"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer

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