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Dell Forecasts Death of PC in Latest SEC Filing

By - Source: Forbes | B 67 comments

Dell needs to shift as sales of traditional desktops and laptops continue to fall.

In a proxy statement submitted to the U.S. Securities and Exchange Commission on March 29, Dell invited stockholders to a special meeting on its Texas campus on an undisclosed date. Discussions include the company's plans to go private, and issues currently facing the PC industry. Among the topics is an admittance to the "uncertain adoption of Windows 8" and a need to move into as build-to-stock business mode.

In the filing, Dell acknowledges "fundamental changes in the PC market" which include a decline in worldwide revenues for desktop and laptop PCs, and lower shipment forecasts for PC products. There is significant and increasing competition, the company said, from efficient, low-cost manufacturers relying on the build-to-stock model, and those that produce innovative, higher-margin PC products.

Dell stated that long-term challenges effecting PC sales include the uncertainty around Windows 8, the lengthening on the replacement cycle of PC products, and the unexpected slowdowns in enterprise Windows 7 upgrades. Even more, the continued increase of consumer interest in tablets and smartphones will likely replace the desktop and notebook, and currently Dell only manufactures tablets in "limited quantities" – it has no smartphone portfolio whatsoever.

In the filing, the company also warned of the significant uncertainties as to whether, or when, the decreasing revenues in the desktop and laptop sectors will end – if at all. There's also the overall difficulty of predicting the market for PCs "as evidenced by the significant revisions in industry forecasts among industry experts and analysts over the past year".

Here are a few more problems Dell is facing: the ongoing downward pricing pressure and trend towards commoditization in the desktop and notebook personal computer market; and a shift in demand from higher-margin premium PC products to lower-margin value products. Dell also acknowledges the increasing usage of alternative, non-Windows operating systems for the PC, and the increasing adoption of "bring your own device" policies by businesses.

Dell helped build the customizable desktop scene that we know and love today, but the company is now facing a different market that's fueled by the launch of the original iPhone and iPad. As stated earlier, the growing use of tablets, high-end smartphones and even ultra-thin notebooks is killing the traditional desktop and notebook market as more computing power is packed into these highly mobile form factors.

Like HP, Microsoft, Google and even Nvidia, Dell will need to diversify, to address the mobile consumer-based "BYOD" market that's slowly being allowed into the company's coveted enterprise market.

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Top Comments
  • 24 Hide
    toddybody , April 2, 2013 11:08 AM
    You can have my PC, after you pry it from my cold, dead fingers.
  • 22 Hide
    the great randini , April 2, 2013 11:14 AM
    Its just a sad ploy to lower the stock price so he can buy out his own company and take it private agian. What gamer wants to play bf3 on a tablet.
  • 19 Hide
    kylerg , April 2, 2013 11:08 AM
    I don't see the PC market declining, ever. It's called competition and as time goes on, more and more competition surfaces. There will always be things that computers are superior at that tablets and phones cannot do (yet, I guess).

    I guess Dell is trying to say that since their company is declining, the PC market is. Which is the dumbest thing I have heard. It's called user awareness and as users become aware of what their buying they turn to better deals or the DIY market.
Other Comments
    Display all 67 comments.
  • 19 Hide
    kylerg , April 2, 2013 11:08 AM
    I don't see the PC market declining, ever. It's called competition and as time goes on, more and more competition surfaces. There will always be things that computers are superior at that tablets and phones cannot do (yet, I guess).

    I guess Dell is trying to say that since their company is declining, the PC market is. Which is the dumbest thing I have heard. It's called user awareness and as users become aware of what their buying they turn to better deals or the DIY market.
  • 24 Hide
    toddybody , April 2, 2013 11:08 AM
    You can have my PC, after you pry it from my cold, dead fingers.
  • 22 Hide
    the great randini , April 2, 2013 11:14 AM
    Its just a sad ploy to lower the stock price so he can buy out his own company and take it private agian. What gamer wants to play bf3 on a tablet.
  • -5 Hide
    SchizoFrog , April 2, 2013 11:19 AM
    I didn't bother reading this article because it is the same old crap. However, they are right in one aspect, eventually PCs as we know them today will die and disappear. That is the evolution of technology but it will not happen any time soon. Early adopters of new technology already experience computers in a whole new aspect, even wondered what it's like to be Bill Gates for example?
    The majority of people are no where near this level of adoption though. We still haven't got the internet everywhere yet in the first world, let alone in less developed countries.
    The PC as we know it will be around for many years to come.
  • 6 Hide
    battlecrymoderngearsolid , April 2, 2013 11:22 AM
    I Forecast the Death of Dell. The Desktop PC is like the Revolver of the Computer World: It just Works and Is The Way to go for High Power Needs.
  • -2 Hide
    de5_Roy , April 2, 2013 11:26 AM
    pc market dies every other quarter for different un/realistic reasons.
    diy enthusiasts get screwed over by cpu companies every year.
    pc gaming gets killed off by consoles every year or whenever a console, no matter how minor or insignificant(psvita) launches.
    dell captures the number one spot as pc vendor.
    every one buys dell smartphones and tablets.
    :sol:  :whistle: 
  • 6 Hide
    toddybody , April 2, 2013 11:27 AM
    the great randiniWhat gamer wants to play bf3 on a tablet.


    Absolutely. I dont think many PC enthusiasts are gaga about massive cases/power requirements/etc(ok, secretly we are)...but physical peripherals are essential to the gaming experience.

    Hell, it be great if an Apple TV could run BIOSHOCK Infinite at 120FPS, Max Settings, 1440p...but until these watered down consumer devices outpace software, no thanks.
  • 5 Hide
    rooseveltdon , April 2, 2013 11:28 AM
    the PC can't die, it can only evolve, different people have different computing needs, some people need way more computing power than what is available with tablets and smart phones. The only thing that changes is technology but the PC won't die.
  • 1 Hide
    g00fysmiley , April 2, 2013 11:42 AM
    yep sounds like him trying to worry shareholders and drop price of stock down so he can pick up the peices for cheap
  • 0 Hide
    ChromeTusk , April 2, 2013 11:50 AM
    "Bring-Your-Own-Device" is convenient, but may create security holes unless a company has proper measures in place. As for the death of the PC, even if demand from mainstream consumers and businesses decline it will always have a market of enthusiasts.
  • 0 Hide
    sundragon , April 2, 2013 11:52 AM
    windy55trottermy roomate's step-aunt makes $66/hour on the internet. She has been without work for five months but last month her pay check was $12931 just working on the internet for a few hours. Here's the site to read more,,,,,,,,,,,,,,, www.Bing30.com


    OMG, do they let anyone sign up on this site?!? News that's 2 days late. Lack of editing. More spam than any other tech site...

    Sigh...
  • 0 Hide
    unksol , April 2, 2013 11:53 AM
    the great randiniIts just a sad ploy to lower the stock price so he can buy out his own company and take it private agian. What gamer wants to play bf3 on a tablet.


    What gamer would want to play BF3 on a Dell? Just because enthusiasts want high end PCs and refresh doesn't mean the population as a whole needs or wants to spend money. They dont. And that's who Dell targets

    The FACTS listed are fine and true. We arent on the upswing of the PC market. Sales are decreasing. But they certainly aren't about to die. Other devices are taking money/market share. And Dell needs to adapt. So why is everyone commenting on the title? That's not what Dell said, that's just a bad title picked by a reporter to get clicks.
  • 2 Hide
    matt grafton , April 2, 2013 12:00 PM
    Quote:
    What gamer would want to play BF3 on a Dell? Just because enthusiasts want high end PCs and refresh doesn't mean the population as a whole needs or wants to spend money. They dont. And that's who Dell targets


    If Dell is targeting people that don't want to spend money it's no wonder they are going broke.
  • 0 Hide
    jaslion , April 2, 2013 12:00 PM
    if the pc dies than evrything will go down
  • 3 Hide
    sundragon , April 2, 2013 12:01 PM
    I think a lot of you make very good points.

    Here's a list of things that will prevent the PC from going tits up:
    Desktop editing
    Workstation applications
    Architecture
    CAD
    Spreadsheets/accounting
    Photo editing

    All of these require large screens and PC levels of processing power (yes, higher end laptops can manage)

    No iPad, Android or Surface is gonna be able to do that.

    I haven't touched on gaming because there is something intimately creative about building your own rig. Aside from wanting epic levels of performance, we want things our way and again no consumer level of touch screen device is gonna do that.

    The PS4 and Xbox 720 may be leading edge (doubably) on launch but in 2 years they are gonna be behind the times. There is a place for console gaming and it's successful for what it is, but with the advent of mobile gaming, they are gonna have to change the formula of waiting 7 years between refreshes.
  • 0 Hide
    sundragon , April 2, 2013 12:03 PM
    *doubtably
  • 0 Hide
    razor512 , April 2, 2013 12:10 PM
    PC's will always be more powerful (It takes a lot of time to shrink something down).

    It will always have it's place like others have listed (especially with gaming), but it requires companies to not cut corners like dell did with many of their systems.

    For example, charging $1000 for a computer and having it stuck with some intel onboard crap and a 300 watt power supply.

    or ruining their reputation further by buying alienware and continuing their ripoff habits. it is almost like if a company like steam/ valve kept everything the same except the adding of a nazi squad to go and spread torment and racism. even if the steam service it's self stays the same, it will likely begin to do poorly due to their other unpopular actions.

    Buying alienware is like tying a a large cinderblock to your testicles and then going swimming, things just wont turn out well.
  • 2 Hide
    tadej petric , April 2, 2013 12:18 PM
    First second when there wont be a single person on the earth that wants to have PC Ill be already dead.
  • 0 Hide
    cRACKmONKEY421 , April 2, 2013 12:19 PM
    Tons of people are still buying PC's. Sure, the people who traditionally bought Dells as a home computer are buying way less. And companies (mine is the only one I can think of) went Dell for a few years, then we went right back to HP. We have a lot more problems with the Dells. Having a crappy build quality--dead PSUs and shitty capicitors--that's why our company switched. Sure, I expect the most problems with the lowest end computers, but they need and could have a rock solid bottom line. Better quality PSU's and motherboard components would be all they needed to fix to keep our company. But HP seems to to a slightly better low end PC for the workspace. Slightly worse reliability could easily cost millions of dollars in potential loss for our company. Always using a well built motherboard with a well built PSU for every level of platform is really what they should focus on. Reliability is always more important than speed. The problem is that tech buyers look at dollars and speed, then they realize in the end that there are hidden aspects of quality that are vital to stability, and that HP often does slightly better than Dell in those aspects (in the low end computer anyway).
  • 3 Hide
    zubikov , April 2, 2013 12:20 PM
    It's called a poison pill. A public company will do something drastic when it doesn't want to be taken over by a certain party (Carl Icahn). By saying that the PC industry is dead, Dell and his private equity takeover buddies are making an argument for making Dell a public company. Icahn and his buddies are pushing to keep Dell public with a significant ownership interest from them.

    If Icahn takes control, Dell won't be able to make drastic moves to reinvent itself as a post-PC company. Michael Dell will probably have a restraining order and after Icahn has made his billions, the company will burn to the grouond. If the white knight Michael Dell and his friends take over, you won't see what Dell is doing each quarter, and after disappearing for a while, the company will reappear as an awesome new tech firm. That's the idea here.
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