Dell stock drops

Image representing Dell as depicted in CrunchBase

Image via CrunchBase

Dell Inc.‘s decision to cut its revenue forecast for the year shows how computer makers are getting pulled in two directions at once, stretching some investors’ faith to a breaking point. Corporate and government demand for PCs has been strong for the past year, helping to lift the industry after the Great Recession. But consumer demand has collapsed because of high unemployment and the lure of new gadgets such as tablet computers and smartphones. Worrisome new economic signs and budget cuts threaten to hamper the recovery. They have cast doubt on the ability of Dell and other PC makers to lift themselves in a meaningful way.

Dell stock fell more than 7 percent Tuesday even as the company said its net income rose 63 percent in the latest quarter. The company lowered its revenue forecast for the fiscal year ending in January. It blamed “a more uncertain demand environment” than previously envisioned and a corporate decision to focus on more profitable deals. Apple, a key player in inventing the PC some 30 years ago, is thriving even as the PC industry suffers because of the company’s pioneering of new markets, including tablet computers with the popular iPad. Over the past week, Apple has traded places with Exxon Mobil Corp. as the most valuable company in the world.

Outside of demand for Apple’s Mac computers, consumer demand for PCs has cratered, reducing growth and even leading to contraction in the U.S. and Europe. Although consumers make up only 20 percent of Dell’s PC business, they remain a powerful force in the digital economy. By snapping up iPads and smartphones, consumers are demonstrating that some hot new technologies just not PCs can be strong sellers even in hard economic times. Check out the full article here and if you are looking to learn more about Social Media and how it can help your business… Visit our homepage today at http://www.kimberleyvassal.com for more information and a free quote!

One comment

  1. I think it has finally come, in the next 5 years we may see a fall out of the PC, and the Laptop(Well Kinda) we will move to a transition of more mobile devices like the IPAD, Tablets, and Smartphone. I think DELL is pretty much hit for now, not to mention this whole Cloud(something I cannot say I know to much about but I hear could be the killer of Dell and MFST)

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