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Dell's profits shrink as revenue grows

Profits for Dell - the world's third-largest computer seller by shipments - declined 4.8 per cent during its fiscal fourth quarter despite an increase in sales for each of its business units. Steeper component costs were part of the problem. Plus, cheaper consumer PCs accounted for a larger percentage of sales. Dell's net income …

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Anonymous Coward
Stop

Note to Dell

Stop treating customers like crap. Start shipping on time. Stop treating suppliers like crap.

Maybe, just maybe you can start making more money..

Andrew Oliver
Stop

By the numbers

OK, what am I missing here?

> Dell's net income slipped to $334m

OK, so total income across all business units was $334m. Got it. Now the breakdown:

Dell's Large Enterprise: $281m

Public sector: $333m

Small and medium business: $282m

Consumer PCs: $9m

Those 4 divisions together total $905m

Where's the other $571 million LOSS to bring the total income down to the reported $334?

And isn't $9m income on $3.5bn consumer PCrevenue a pretty piss-poor margin in anyone's books? 0.25% margin. really?

elderlybloke
Linux

Alas

Dell wont get anything from me.

I go for the White Box solution, my trusty local Computer man and I obtain the good quality components , he puts them in , installs Ubuntu OS and all for a very reasonable cost.

I do the upgrades after that and everything is just how I want it.

Chris Reynolds
Thumb Up

Efficiency done, now stop faffing and figure the enterprise space

Dell have trimmed their excesses back to the bone. They've got skilled employees in cheap locations and they've turned back from the 'cheap at all costs' route that led them to selling nasty kit a few years back.

There's not much further they can go with improved efficiency and people don't like Dell kit that's cheap 'n' nasty like Acer so they have to drive harder and harder into the enterprise space.

They have always done good corporate gear. PowerEdge servers, Latitude notebooks and OptiPlex desktops are a great starting point.

Daniel 1

"Third-largest computer seller by shipments"?

What does that actually mean? Virtually every computer manufacturer on the planet has their computers made for them by Quanta Computer Incorporated, anyway (and that includes Dell's own Latitude range, and the Alienware brand). A third of all golbal notebooks sales, are rebranded Quanta machines (including all the Apple range and every XO-1). In fact, Dell is unusual in still maintaining large scale assembly plants of its own.

Maybe we should say that Dell has slipped to number two spot, and will probably remain there until a third major assembler joins in (Flexronics get my bet)?

Anonymous Coward
Anonymous Coward
Reply Icon

I think

You are confusing an assembly plant with a computer company.

OldDogNewWalk
Unhappy

Would you buy from Dell?

I know mileages vary, but who buys from some of these companies?

Never bought Dell 'cos of the web horror stories regarding their after sales (dis)service. It seems that if you get a _good one_ you end up with a fine product at a reasonable price. If you end up needing service; the word seems to be... Dump it and buy something else, from someone else.

Would not buy HP again after my suffering with one of their colour laser printers. Hardware seems fine but the consumables prices are WAY high and the control software is, IMHO and only on a good day, shit. Massive, flaky and stuffed full of sales guff and phone home attempts is about the nicest thing I can find to say about the software. ( 'tho printer works fine under Linux which is nice : )

Have bought Acer products and never had any problems ( unlike Asus, shudder ) but not with Windows so perhaps I have been lucky.

I act as IT everything for my wife's company and while I have given up buying desktop computers, as I reckon they can be home built cheaper and better, laptop purchasing is still a nightmare. The last one I bought was a Lenovo as it was the right spec and available with XP Pro rather than Vista. I spent so long removing all the crud that had been loaded on as _extras_ ( and they dump EVERYTHING into the C: drive root ), and partitioning so that data was separate from programs and Linux could be loaded (she has promised to move to Linux in the near future), that I think I could have built it quicker out of raw materials. That PC was such a mess that Lenovo is definitely off my list.

I want to be able to buy a product without all the extra crap that the producers get paid £15 a unit to add, even if it costs me more. And I want an original software disk with drivers so I can always do a repair or clean install. Is that really too much to ask?

And another thing .......

Anonymous Coward
Anonymous Coward

Still not looking healthy over 3 years

Annual revenue is down 10% from 3 years ago, and that's without subtracting the revenue Dell has bought in with the takeover of Perot et al.

Dell claims to have removed $3B in annual costs in that time. Where's the $3B extra profit? They seem to have lost a matching $3B in pricing power.

Dell claims to have downsized heavily, outsourcing product design as well as manufacture. But property plant and equipment asset is only down 10% in 3 years.

Dell claims to have been hurt by higher component prices, yet in the same quarter HP and Apple made increased margins buying the same components and selling in the same market.

Despite having "slimmed down", the balance sheet shows a one third increase in total liabilities (and matching "intangible" assets).

Dell is 3 years older, shrinking, and deeper in debt. Reminds me of people who remortgage to maintain their lifestyle when they get a pay cut . . .

Anonymous Coward
Anonymous Coward

Shaft the Channel

Dell are shifting away from business class and channel sales to partners. Instead they now advertise on TV and sell in PCWorld. all low end stuff so this makes sense.

As a VAR we we constantly battle with dell over how much discount the give to End Users. basicly cutting out the channel. why do the make partners jump through hoops to attain dell certification only to find they are happy to quote end users at a 40-50 % list discount. No wonder many VARs are shifting to HP. Much more channel Friendly.

What do Dell expect.

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