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Profits down, Dell is still optimistic

Sections: Business News, Computers

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DellIt should be of no surprise that yet another computer manufacturer is declaring a disappointing quarter in comparison to the same quarter of the previous year. Thankfully not every company is posting losses like Sony and Palm did. This time it’s Dell’s turn to admit that although it’s still making a profit, the profits aren’t as much as they could have been.

Dell is posting a 63% drop in profit, though it still managed to pull a net income of $290 million, compared to $794 million during the same quarter last year. A large reason for the decline is that Dell relays mainly on business and government sales, with those sectors making up three quarters of its business. Between the recession and possibly the upcoming Windows 7 businesses and governments just aren’t buying that many computers right now.

Dell is also having a hard time keeping up with Acer, who is now tied with Dell for the second largest computer maker (HP is number one). Acer can sell their computers for much less than Dell can when it comes to consumers sales. Though the consumer market is secondary to Dell, it’s still important if it wants to continue in the way it has. But for the moment, consumers might be more likely to go for the cheaper Acer computers simply for the price.

Dell remains optimistic about the year, which isn’t surprising. The release of Windows 7 might see an increase of computer sales as people upgrade to the new OS. There is always a chance that some consumers won’t want to upgrade after Vista let them down even fit they never used it. However, once people actually try 7 they might be interested, and could prove Dell right by going out and buying a new computer.

Read [NY Times]

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  • Business Consulting Services

    This is not much a surprise. Generally, people nowadays aren't that impulsive compared before. They've learned that they need to save hard cash and recycle materials that are still usable including computers. The same applies with businesses, most of them are cutting their cost down to avoid great loss. Instead of renewing systems, they tend to stick with the old one which is still effective. This would then result to less profit for big companies such as Dell. But it's a good indication of their brand that they are still able to profit despite all this.

  • gandharva

    oh, not a surprise, since today all we know have liitle knowledge about computer and its current news.

    But the main thing to keep computer working is, Hard Disk Drive, Data, files etc.

    these are only thing which we have to protect and also protect Hard Disk Crashing….

    But system requirements and configuration is all depend on my work.

    thanx….

  • MSFT_GlenF

    Shawn,

    Thank you for that interesting information regarding computer sales and operating systems. It's always enlightening to hear from the consumer. We can only hope that the change to Windows 7 might encourage others to try it and possibly be happy with it and their computer. You should check out the Windows 7 forum, at microsoft.com/springboard. It provides support, "how to" video guides and the several other tips and tricks to make your Windows 7 experience awesome.

    Thanks

    Glen

    v-glferg@microsoft.com