It 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]