Dell holds out hope for PC industry

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Dell holds out hope for PC industry

Despite turning in quarterly figures showing a fall of 23 percent in profit, Dell thinks that corporate entities will start buying PCs again in the second half of this year, although strong sales to the commercial sector aren’t likely until 2010.

Dell relies heavily on selling PCs and servers to large organizations while retail sales do not form large part of its armory.  Dell figures show that while shipments of PCs rose 17 percent in the quarter from the same period last year, its margin on these products is very slim.

The figures show that sales from large enterprises amounted to $3.3 billion, 32 percent down from the same period last year. Dell said that IT spending by large companies was lower worldwide.

Dell segments public revenues differently, and said sales to governmental bodies and to health care grew 20 percent sequentially, but fell by 16 percent year on year.

CEO and chairman Michael Dell said: “If current demand trends continue, we expect revenue for the second half of the year to be stronger than the first half.”

The company expects seasonal demand improvements in both the US federal government and consumer businesses, but continues to think that the commercial market won’t start to improve until next year. It’s under pressure because of component costs and aggressive pricing.

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