Dell warns of earnings miss; shares plunge 15%

Dell plunged 15% to $18.72 in pre-market Inet trading after saying it expected fiscal second-quarter earnings of 21 to 23 cents a share, below the average analyst estimate compiled by Thomson First Call of 32 cents a share, due primarily to aggressive pricing in a slowing commercial market.

The Round Rock, Texas-based Dell now sees earnings of 21 to 23 cents a share for the July period on revenue of about $14 billion.

Current market values:
• Apple – $51,064,500,320
• Dell – $44,447,732,640

MacDailyNews Take: If Dell ceased to exist today – say Michael Dell sold the company and gave the money back to the shareholders – nobody outside the company would care. Another Windows box assembler would simply slide into place and the mediocrity would continue unabated.

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Time Magazine on Apple’s 13-inch MacBook: ‘Dell and HP should be very worried’ – June 07, 2006
The Channel Insider: Dell is no Apple – May 31, 2006
Will Dell’s retail computer stores work sans inventory? – May 30, 2006
Dell to open retail stores – May 22, 2006
Dell burned by selling machines at bargain-basement prices last quarter, pain may not be over – May 09, 2006
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Apple primed to pass Dell in market value – January 12, 2006
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  1. Whoa!
    Apple has it’s second best quarter and the next day Dell announces that they won’t meet their predections.

    What’s going on… I’ll tell you. People are buying more Macs.

  2. Dell has lost it’s shine perhaps, but they still command a whopping 30% market share.

    What Apple is doing is stealing Dell’s thunder.

    If Apple started selling Mac’s with the option of Mac OS X or Windows, or both. They could do some serious damage to Dell with Apple’s numerous high profile stores.

    Apple store employees are actively selling MacTels to customers with the intention they go home and install Windows.

    After all they are salespeople and salespeople work on commission.

  3. You people are taking Microsoft’s immense power and market position far too lightly.

    Dell is firmly entrenched with Microsoft, and as such will rebound quickly. It will be Apple’s stock that will be in the toilet just as soon as Microsoft releases an ultra-stable, secure Vista and a highly anticipated, iPod killing Zune…

    … which will be never…

    Rest in pieces, Dull and Microshaft.

  4. Dell plays in the razor-thin-margin market while Apple stays out of the garbage dump. Dell is under price pressure from the Chinese (Lenovo, etc) in the commodity market and from Apple at the high end. They are literally between a rock and a hard place.
    The next time some pundit runs their mouth about why Apple should play in the throw away end of the market point them to this– you cannot make money at that end.

  5. Yes it is very unfortunate that the average – read dumb – Windows user won’t or is so clueless to consider alternatives to the mediocre world of Windows and switch to either Linux or Mac.

    Just today in a local newspaper they are running a poll on the dumbest error messages their computers display in front of them.

    Check it out yourself here:

  6. Dell and Microsoft have seen better days and I really don’t see any future for either company, at least in doing what they have been doing. As a Windows box assembler, Dell is nothing special. Dell machines fail ROUTINELY where I work. Their monitors are nice, though, and I’ve heard many a Machead speak positively of them. If I was Dell, I’d branch out into something else besides computers while I was still solvent. Leave the low end to folks like Tiger and leave the high-to-middle ground with Apple.

  7. To Mr. Gorilla, please do not put apostrophes where they’ don’t belong.

    Its denotes possession, It’s means it is. Gorillas may not be able to remember that, but cows do and it offends us to have to see errors repeated until they become acceptable.

    Next, the plural is indicated by adding an s without a preceding apostrophe. The plural of Mac is Macs.

    This message in the interest of the whole herd, not just a pride of gorillas.

    Hortense prays that the gorillas do not reoffend.

  8. The truly funny part about this is that Dell is about to open retail stores…but you won’t be able to actually BUY the product and take it home!!!
    You can SEE it and enjoy all the wonderful windowsness in a kind of poorly guided demo…then PAY…and wait for your machine to arrive in a brown truck.
    I recall some years ago that Sears tried this. They called them Catalog Stores. You’d go in, look at a refrigerator, and then a week or two later it would show up. How many Sears Catalog stores do you suppose are still out there? None. They had all closed by 1993. Just like the Mail Order catalog Dell’s model doesn’t account for the human need to interact and get assistance when you need it…in person….and BUY it and take it home immediately…

    It HAS worked of course to discount the crap out of what they sell, offering the lowest of the low, only to upsell when they get you on the site or the phone. Dell’s 30% market share is sustained only by constant huge marketing dollars. Don’t be surprised to see HP make a major push with the arrival of Vista and take some more of Dell’s market share.
    Apple will gain too…likely 1% possibly more…which of course translates to close to a billion dollars.

  9. ” If Dell ceased to exist today – say Michael Dell sold the company and gave the money back to the shareholders – nobody outside the company would care. Another Windows box assembler would simply slide into place and the mediocrity would continue unabated.”

    The same could be said about Apple or any other PC maker, The others would take their share and life would go on.

    And Apple’s not so sufficiently different that anyone would mourn the passing of their PC business other than a few Mac afficionados and the antitrust guys at Microsoft (Who need some competitor, even one with only 2% worldwide share, to point to as a “Competitor” to Windows.)

  10. Where is the companion story about the Microsoft $40 billion share buyback? That is a bigger story than Dell, because it is PROOF that MS has given up on being a growth company.

    MS actually IS giving the money back to the shareholders.

    Even more telling is that the stock price barely budged on the announcement, which is NOT what you want to have happen when you announce a buyback.

  11. Ah, schadenfreude! Dell drops like a lead balloon, while Apple rockets ahead. How sweet it is. It is all coming together folks. Steve made the smart choices, the goodies are in the pipeline and the vision is brilliant at 1 Infinite Loop.

    A few more years of this and I’ll be financially independent and be able to buy multiple Macs on a whim. I am already thinking of writing parallel code for a collection of new Intel based Xserve boxes — just for fun.

    I’ve done a lot of scientific and engineering modeling and simulation in my working life and like to play with that kind of stuff. Who knows, maybe in my old age — which is already here — I’ll even get a business out of it. Smile Apple folks. Just wait until the next quarters results make the current one look like a fart in a hurricane.

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