Dell's 2Q comes amid PC strife

(AP) -- Dell Inc.'s latest earnings come at a difficult time for the PC industry. Consumer demand is sagging, as tablets and smartphones steal market share. The Round Rock, Texas-based company's fiscal second quarter results, scheduled to be reported after the market closes on Tuesday, Aug. 16, are expected to highlight those pressures while underscoring Dell's focus on corporate PCs, an area of strength right now.

WHAT TO WATCH FOR: The consumer PC market is widely known to be suffering. Meanwhile, corporate demand is helping. Analysts will be watching closely for signs of how well Dell is managing that tricky balance. Dell is banking on additional lines of business, such as technology services, to help protect it against swings in PC sales.

There are continued signs of weakness. Evercore analyst Patrick Wang wrote in a research note this week that "PC sentiment has been negative for some time" and that recent checks with suppliers indicate that demand hasn't picked up.

WHY IT MATTERS: Dell is the world's No. 2 PC maker. And its focus on corporate, rather than consumer PCs is proving helpful, with consumer PC demand flagging. Some 80 percent of Dell's PC revenue comes from corporate and government customers.

WHAT'S EXPECTED: Analysts polled by FactSet expect of 49 cents per share, excluding items, on $15.74 billion in revenue.

LAST YEAR'S QUARTER: In the year-ago period, the company earned 32 cents per share on an adjusted basis, on $15.5 billion in revenue.


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Aug 12, 2011
Diversify.

Even if you have to buy the smartphone company's stock, at least do that.

With all of the new technologies being developed, they need to spread their interests around the tech sector, or risk becoming obsolete.

Multi-core technologies and smartphones are going to be problematic for PC makers over the next several years, because the computers are so good that there is little reason to upgrade unless to replace broken parts or something.

In the 1990's, it was mhz and MB
In 2000's it was ghz and GB, and at the end multi-cores

the 2010s will be about TB, Multi-core, and photonics

People who don't do a lot of gaming or development will find that one computer will serve their purposes for several years, possibly well past the "extended service" warranty.

From this perspective, the PC companies cannot expect to make a sale every year or two to the same customer any more.

Aug 12, 2011
Lies! Shitty Dell laptops will fall apart shortly after the warranty expires. Hard drives stop working. Lithium ion batteries only have a service life of about 18 months before they're practically buggered.

Desktop computers are as good as dead for anyone that doesn't play games or create in a professional way. People will still buy new laptops because manufactures don't bother to built them to last 5 years, and people buy new devices before they replace the batteries.

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