“Projected sales and earnings shortfalls are the latest signs that Dell’s heady days of outpacing its rivals are ending. And investors aren’t happy,” Louise Lee reports for BusinessWeek. “On the surface, the Oct. 31 news out of Round Rock, Tex., is bad: On Oct. 31, Dell said it would fall short of both revenue and earnings expectations for its fiscal third quarter. Look beyond the surface, and the long-term situation at the world’s largest PC maker may be even worse.”
“After years of heady growth, Dell may be coming back to earth. As the computer giant approaches $60 billion a year in sales, it has now missed expectations for two consecutive quarters. The shortfalls are a sign it may be struggling to manage costs while it tries to sell enough computers to maintain a lofty revenue-growth rate, and keep gaining market share,” Lee reports. “Meantime, companies with more innovative products and better support, such as Apple, are growing at a faster pace.”
Lee reports, “Dell ‘is too much of a one-trick pony,’ says a former high-ranking Dell executive. ‘They’re not innovating, or building enough new businesses. They’ve executed flawlessly for 10 years, but that’s kind of an impossible thing to continue.’”
Full article here.
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