Plenty of life left in PCs, says Dell
PC maker Dell has hit back at industry doomsayers by insisting that the PC is far from dying at the hands of mobile devices.
PC maker Dell has hit back at industry doomsayers by insisting that the PC is far from dying at the hands of mobile devices.
Last week, analysts predicted that slowing desktop sales could lead to major jobs cuts at the company for the first time.
Chief executive Michael Dell, speaking in London last week, responded by saying: "What happened to all the other things that were supposed to take over from the PC?" Other devices complement the PC but do not provide a complete replacement, he said.
Dell confirmed that his company's priority lies at the higher end of the market, and claimed that readiness for wireless and hand-held devices was not yet enough to warrant their development as replacements for PCs.
He added that in five years' time the notebook and handheld markets will be equal in terms of units shipped, but that turnover would be 91 per cent and nine per cent, respectively.
Dell said that his company will continue to sell third-party handheld products for the moment, and has not ruled out the possibility of entering the market directly in the future.
But the vendor will continue its drastic price cutting regime to maintain an edge over its competitors, said Dell. Rivals have claimed that the company is trying to push them into a discounting corner.
Michael Capellas, Compaq's chief executive, claimed that Dell is implementing a loss leader strategy to bolster its market share. "There is a lot of chatter about PC price wars and market share. We will continue to hit the highest growth segments of the PC market, even if we lose share in the short term due to price wars," he said.
"Dell's core business is in PCs and it is a market that is slowing down," said Andy Brown, an analyst at IDC. "The company has stated an interest in high-margin products, but I cannot really see it challenging Compaq and IBM in the server business. This year is going to be difficult for Dell. It is already feeling the pinch."