Dell Chief Says Company Shifting Away From PC And Has Not Decided On His Successor
Michael Dell, chief executive of Dell Inc, which trades in the country as Dell Australia.says the strategic shift by the company away from personal computing is positively impacting the bottom line, and that Dell will continue to invest as it seeks to change its margin and profit profile.
Round Rock Texas based Dell has been slowly weaning itself away from personal computers which are commoditised and offer razor thin margins. Instead the company has bought its way into the higher margin services business through the acquisition of Perot systems, which it bought a couple of year ago.
Speaking at a conference on Wednesday, Mr. Dell said that as the company transforms into a solutions and services company, with a much greater emphasis on intellectual property, margins are being bolstered, which should have the effect of driving profitability going forward.
“I think we can continue to change the profile of the company in terms of margins [and] operating profits, and we’re on a pretty good path to do that,” he said. The PC is “not the epicenter of the profit engine for the company.”
Mr. Dell was keen to point out, that so far the company has no intention of divesting its bread and butter PC business, though it has sold of a number of units as it rebalances its portfolio mix.
The trend of technology company’s of late, including that of rival Hewlett Packard, has been to follow the path set by bellwether IBM, which transformed itself into a one stop shop that provides everything from consulting solutions, storage, networking and servers. IBM eventually did divest its personal computer business, selling its ThinkPad brand onto Lenovo.
Mr. Dell says that so far the company has not decided on a successor for his eventual departure, which he says me either be planned or unplanned, though so far he does not intend to either retire to take Dell private.
“I’m not planning to leave, and the board hasn’t told me I’m leaving,” he said. “I will continue to do this for quite a long time.”
Last month Dell, which trades in the country as Dell Australia., reported a near tripling of profits, as it benefited from falling component costs, and robust demand from the corporate sector which drove sales of higher margin products.
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Lenovo Earns Green Accolade For ThinkPad
Lenovo Group, which operating in the country as Lenovo Computers Australia has become the first PC manufacturer to earn a gold rating for its laptops under the UL Environment Sustainable Production Certification (SPC).
The rating was given to Lenovo’s ThinkPad420 model, which the company will launch at the end of his month. The laptop earned the accolade because of its use of post consumer recycled content, and low halogen. The design of the laptop also makes it easier to dismantle for future recycling and reuse after its own life.
A number of ThinkPads Lenovo is planning on releasing this year use over 10 per cent post consumer recycled content, whilst some of the company’s desktops and monitors utilize as much as 65 per cent recycled content.
The UL Environment review process takes not of product documentation, energy compliance and manufacturing. The assessment program builds on the IEEE 1680 sustainability standard, which also guides the more familiar EPEAT green technology certification process.
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Global PC Shipments Miss Estimates Posting Weak Gains
Technology market research firm IDC on Wednesday said that worldwide shipments of personal computers missed growth projections rising by 2.7 per cent during the fourth quarter as consumers refrained from making purchases over the holiday’s and choosing iPads over desktops and laptops.
Hewlett Packard remained the largest PC manufacturer even though its market share declined by 0.7 per cent to 19.5 per cent. Dell leapt into the second spot with 12.1 per cent market share, whilst Acer came in third with 10.6 per cent.
IDC analaysts David Daoud said his company had forecast growth in global shipments of 5.5 per cent. Mr. Daoud attributed the moribund growth to US consumer reluctance to purchase new computers amid economic uncertainty, since their existing machines were good enough to perform most tasks.
“The consumer market is the one that’s feeling fatigue,” Mr. Daoud said, adding that PC shipments in the U.S. fell 4.8 percent in the quarter, IDC said.
Mr. Daoud said that the iPad has emerged as a viable alternative to traditional PC’s, having sold 7.5 million units as of September 25th.
Worldwide fourth-quarter PC shipments totaled 92.1 million in the fourth quarter and 346.2 million for the year, an increase of 13.6 percent from 2009, IDC said.
IDC rival Gartner estimated fourth quarter PC shipments at 93.5 million up 3.1 per cent from a year earlier. The company had previously forecast 4.8 per cent growth. Gartner said that tablets and video game consoles provided alternatives for consumers.
Gartner ranks HP as the top global PC manufacturer with 18.8 per cent market share, having declined from 19.6 per cent a year earlier. Gartner reckons Acer is the second largest PC maker with a 12.7 per cent market share, and ranks Dell third with 11.6 per cent market share.
Both research firms said that the trend of enterprises upgrading older systems to newer PC’s running Windows 7 remained in place.
According to IDC the upgrade benefited Dell the most, enabling the company to leapfrog Acer as the second largest PC maker in the world.
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Michael Dell Says Acquisitions Will Transform The Company
Michael Dell, chief executive of the global computer manufacturer that bears his name says that Wall Street has failed to take notice of his efforts to transform his company, and that its strategy of acquisitions will prove critical to the company’s long term future.
Mr. Dell says he is wary of increasingly frothy valuations of technology companies and that he has no intention of paying unreasonable prices for new acquisitions.
Mr. Dell is nearly into the fourth year of his second stint at the helm of the PC maker, which finds itself in the position of playing second fiddle to rivals such as IBM and HP in the leadership race for corporate IT solutions.
This week Dell announced a $1 billion bid for Compellent Technologies as it seeks to expand its presence in the cloud computing segment.
Mr. Dell says that his company has become more diversified and aims to become a major player in both the fast growing markets of mobile computing and data centre equipment.
“Five or 10 years ago people would say Dell is a PC company. Well, news flash — most of our margin and profit doesn’t come from PCs. I don’t think people get that. Margins are going in the right direction, the mix of the business is shifting in a pretty considerable way, the picture is starting to emerge more clearly what Dell is becoming.”Mr. Dell said in a rare interview with the Reuters news agency.
At one point in time Dell was the world’s PC manufacturer and its story was often used in business school case studies. Since then the company has lost market share and now competes with Taiwan’s Acer Inc for the position of number two.
Over half the giant’s business is still derived from selling commoditised low margin PC’s, and Mr. Dell makes no secret of his ambition to diversify the company away into more profitable businesses such as software, consulting, services and storage.
Mr. Dell says that selling equipment and services to small and medium enterprises presents a significant opportunity, since it is a segment of the market and one that is often overlooked by investors. SME sales currently constitute a quarter of the company’s revenue and a third of its operating income.
“Dell has an enormous channel that can sell to these customers, and this is also where all the growth is,” Mr. Dell said.
Mr. Dell relinquished his role as chief executive of his eponymous company in 2004, but as the company faltered when the PC market matured, returned to the roll in early 2007 to revive the company’s fortunes which continued to be too dependent on PC sales.
Last month the company raised its annual profits outlook which failed to impress investors who require more convincing before re-rating the company and giving it a higher multiple.
Dell’s fortunes since Mr. Dell resumed his role as CEO have been mixed, as the company restructures and cuts thousands of jobs.
Mr. Dell cites the company’s strong third quarter results as proof that things are improving and says the company is now on a hiring binge.
As the company diversifies its product range in order to drive growth the company has made an aggressive push into the market for mobile devices, launching a variety of smartphones and a tablet. Analysts remain unimpressed however, saying that those efforts have failed to produce substantial market share.
“It’s early stages for us. We’ve got a lot more products planned next year, particularly as the tablet comes into the mainstream here,” Mr. Dell said.
Mr. Dell pointed out that the company was making roughly eight new acquisitions a year, and that was quantum shift from its behavior over a decade ago, when the company simply did not engage in any M&A.
“We’re absolutely changing our role in the industry,” he said. “At the extreme, you could have said Dell started out as more of distributor, and now you see Dell as an IP owner,” he said, referring to intellectual property.
Dell’s acquisition of EqualLogic in 2008, a storage company is cited as validation of a successful acquisition strategy. However the success of its Perot Systems acquisition, its largest ever purchase is yet to be determined.
The company has roughly $14 billion in cash and short term investments which represents a significant war chest at its disposal. The company says it intends to aggressively add new segments to its business, but will not pay above board and will remain disciplined.
“We don’t have to go buy companies, and if the valuations aren’t reasonable, we’re not going to buy them,” he said.
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The Dell Inspiron One 2310 Review
The Dell Inspiron One 2310, which has been launched recently by Dell Australia, is powerful enough to handle a vast array of standard home applications, and can be also be used as a light gaming PC, and though it tends to be on the pricer side of available options, it is certainly one of the most attractive attractive all-in-one PCs on the market. The multi-touch capability of the PC through Dell’s Stage interface makes it one of the most well rounded all-in one home PC’s out there.
In general all-in-one PC’s offer an attractive and clean design, with the Dell Inspiron One 2310 proving to be no exception in that regard. The PC comes with a remote control for the integrated HDTV tuner as well as wireless keyboard and mouse. The PC is does not come across as complicated and in order to get it up and running, all that is required is plugging the power cord into the socket. The power supply of the Inspiron One 2310 is an external one, a design feature aimed at reducing chassis bulk and reducing heat emission.
The Dell Inspiron One 2310 features laptop grade components stuffed into a 23 inch 1920×1080 LED backlit monitor shell. The machine itself is far from being bulky, however its three part stand is problematic to position properly.
The Dell Inspiron One 2310provides a range of video inputs both analogue and digital, and includes HDMI connectivity, enabling the PC to be hooked up to a secondary device such as a PlayStation.
The Dell Inspiron One 2310 offers six USB 2.0 ports, audio input and output, wired Ethernet, a 7-in-1 card reader and an internal TV tuner, providing all the connectivity that a standard family would require.
The Dell Inspiron One 2310 comes preloaded with Windows 7 Home Premium (64 bit edition), as well as Dell’s Stage software which enables touchscreen functionality.
If you want a personal computer that cuts down on both space and energy requirement, whilst not sacrificing either computing power or convenience, then the Dell Inspiron One 2310 is the one for you
Dell Inspiron One 2310 Specs:
- 23 inch 1080p touchscreen
- Intel Core i5 460M Processor which runs at 3.2GHz,
- 6GB of DDR3 RAM.
- 1TB, 7200RPM hard drive.
- Integrated 1GB AMD Radeon HD5470 graphics card
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Half Of All Windows 7 Operating Systems Being Installed On 64 Bit PC’s
Software giant Microsoft says that the arrival of its latest operating system Windows 7 has dramatically increased the uptake of 64 bit computing, with nearly half of all installations of the OS using the 64 bit version.
Most Dell Computer Australia come preconfigured with Windows 7 which enable the buyer choose the correct version to suit their needs.
According to data provided by Microsoft, 46 per cent of PC which run Windows 7 are powered by the 64 bit version of the OS, a much larger increase than the uptake seen with Vista or XP in the past.
“Compared to Windows Vista at three and a half years after launch, only 11 per cent of PCs running Windows Vista worldwide are running 64-bit,” revealed Brandon LeBlanc of the Windows client communications team.
“The price of memory has dropped over the last several years making it easier for OEMs to up the amount of memory in the PCs they ship. And most major processors in PCs today are capable of running a 64-bit OS,” he said.
“There are also more and more compatible devices and applications for PCs running 64-bit Windows 7,” he wrote in a Windows Team blog post.
Previously Microsoft has offered 64 bit versions of its operating systems, with a 64 bit version of XP made available in 2001.
Despite the multi-tasking benefits provided by a PC which has the ability to support more than the 4GB maximum memory of 32 bit systems, compatible hardware costs and limited software availability has kept the 64 bit version on the sidelines.
To this day, just one per cent of Windows XP installations are 64-bit, while 89 per cent of Vista users are using a 32-bit version of the operating system.
“With Windows 7, running a 64-bit OS is becoming the norm,” Mr. LeBlanc claimed.
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Microsoft sells Seven Copies Of Windows 7 Every Second Since Release
According to a member of the development team of software giant Microsoft’s Windows 7 operating system, says the company has shifted 150 million copies of the OS since it was launched eight months ago, amounting to an astonishing seven copies every second. Dell Computers Australia offers Windows 7 as standard on most models of computer and is in particular useful for their touchscreen desktops as they have advanced functionality only found in Windows 7.
The OS, which went on sale on October 22nd 2009 is officially the fastest selling desktop operating system in history according to Microsoft’s Brandon LeBlanc, who revealed that the 150 million mark was achieved on the back of strong enterprise demand.
“People continue to be excited about the features and benefits of Windows 7, and the PCs that our partners are delivering for Windows 7. Between companies actively deploying and evaluating it, approximately 75 per cent of enterprises are looking at Windows 7 for their organisation.” Mr. Brandon said.
The rousing sales figure is in stark contract to the sales of its predecessor, the much slated Windows Vista, which did not go down well either with consumers or enterprises. The universal loathing of Vista is in large part responsible for the success of Windows 7, with many companies who are thinking of deploying Windows 7, looking to do so directly from Windows XP, a trend also seen in the consumer segment of the market.
The reluctance to switch to Vista has also meant that XP currently holds a dominant 62.5 per cent market share. Vista holds less than 3 per cent, whilst Windows 7 now commands a 12.7 per cent share of the OS market.
PC Sales Starting To Rebound
Global PC sales are expected to rebound in the third quarter of this year signaling that IT spending will be on the rise in the following months, according to new research released on Wednesday.
According to the IDC Worldwide Quarterly PC Tracker Report, demand has been fuelled by back to school purchases resulting in an increase of 2.3 per cent, following declines for the previous three consecutive quarters.
IDC says it expects to see double digit growth next year, and expects that desktop shipments will continue to be flat, whilst portable computers are expected to drive next years growth.
“As commercial spending recovers in 2010, we expect to see robust growth over the next several years,” said Loren Loverde, program director at IDC Worldwide Trackers, in a statement.
Laptops were the driving force behind the third quarter increase in shipments and increased by 33.5 per cent from the previous year.
Netbook shipments also surged in the third quarter, accounting for 28 per cent of all portable computer shipments, almost double the 14 per cent they accounted for in the previous year.
Netbook shipment growth is expected to continue to grow at a lower rate than laptops, as new ultra-thin laptops are cannibalizing sales and creating added competition
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