Dell disappoints despite chip up-tick

Hardware giant Dell delivered its quarterly results showing a profit of $577 million on revenues of $12.9 billion – a drop in profit of 54 percent.

But in the face of other major players in the PC sector, Dell’s results were disappointing. Chip giant Intel, software giant Microsoft and PC rival Hewlett Packard have all shown recent signs of growth.

That poses questions about whether Dell’s overall strategy is the right one. The majority of its revenues come from the corporate market place, and that sector is still showing some reluctance to place big replacement orders.

Compared to the same period last year, Dell’s sales to this sector fell by 23 percent. Even its consumer sales fell 10 percent compared to last year – Dell’s rivals have depended on this sector for sales in the face of the credit crunch. Dell’s profit margin in this sector hovers around a somewhat pitiful one percent.

From being the PC giant it was, Dell has dropped into third place behind HP and Acer.