Dell Forecasts Death of PC in Latest SEC Filing
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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Kevin Parrish has over a decade of experience as a writer, editor, and product tester. His work focused on computer hardware, networking equipment, smartphones, tablets, gaming consoles, and other internet-connected devices. His work has appeared in Tom's Hardware, Tom's Guide, Maximum PC, Digital Trends, Android Authority, How-To Geek, Lifewire, and others.
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kylerg 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).Reply
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. -
the great randini 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.Reply -
SchizoFrog 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?Reply
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. -
battlecrymoderngearsolid 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.Reply -
de5_Roy pc market dies every other quarter for different un/realistic reasons.Reply
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: -
toddybody the great randiniWhat gamer wants to play bf3 on a tablet.Reply
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. -
rooseveltdon 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.Reply -
g00fysmiley yep sounds like him trying to worry shareholders and drop price of stock down so he can pick up the peices for cheapReply -
ChromeTusk "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.Reply