Apple is killing Dell and Hewlett-Packard

“If we are in the middle of the Apple Inc. Renaissance, then we are also in the middle of the Dark Ages of Dell Inc. and Hewlett-Packard Company,” Brian Tracz writes for Insider Monkey. “And I am not merely drawing a metaphor to the overall market sentiment. Both of these companies had a game plan for a future devoid of tablet and cloud computing. And now is the time of reckoning.”

“Legendary short-seller Jim Chanos recommended Hewlett-Packard Company (NYSE:HPQ) as a short sell idea, calling the company a ‘value trap,’ and share prices have only decreased since that interview earlier in July,” Tracz writes. “At roughly the same time, Tiger Cub Phillipe Laffont likened HP to Eastman Kodak Company — a comparison that should send chills down the spine of HP investors.”

Tracz writes, “Things are not much better for Dell Inc. David Einhorn claimed in the fourth quarter that Dell’s P/E ‘reflects a valuation usually associated with collapsing businesses.’ As his fund Greenlight Capital exited the position in the second quarter 2012 at a loss, Einhorn said the Dell’s businesses ‘proved to be a disappointment.’ …According to research firm Canalys, HP underwent a 11.3 percent decline in PC sales year-over-year in the second quarter 2012, and Dell did not come in much better with a 10.9 percent decrease. When gross PC sales increase 12 percent overall, these declines are problematic. I should mention that Apple Inc’s PC sales increased 60 percent in the same period.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “James M. Gross” for the heads up.]


    1. Look, I realize it may be funny to you but it is no laughing matter down here. We are up to our eyeballs in disgruntled Dell and HP users and if you drop those clowns down here, it is gonna get nasty. It’s your mess – you clean it up.

    2. T announced that it was switching to iPads as POS device – liklky replacing Windows PC desktops. Today, Monsanto switching from laptops to iPads for its sales force. Likely replacing Windows laptops. Windows 8, too little too late.

  1. I wonder how HP and Dell feel about their “partnership” with MIcrosoft these days. Microsoft makes margins well north of 40% on the Windows and Office monopolies. OEMs make less than 5% margins, sometimes close to 0%. Now that’s a Microsoft Tax. Parasites would describe their relationships with their victims as “partnerships”.

    1. Exactly.
      Maybe that’s why the upgrade price for Win 8 will only be $40. I have a feeling the OEMs are getting a much better price this time around.

      When PCs were all around $2000 and above, a $50 license wasn’t too crazy. When computers start at $500….

  2. Good! I can’t tell you how many times I’ve upgraded Mac OS only to find that a printer I bought a year or two ago wouldn’t be supported. Serves HP right!

    As for Dell, who really cares?

  3. Do not get me wrong. I been a Apple Fan Boy since the Apple 2. I wish nothing happens to HP but all the other PC makers can die a horrible death. They all make crap!! HP has been good to Apple as far as supporting the platform. Through Apple’s lean times they were still there making printers while everyone else stopped and considered Apple was dead. Let us not forget HP made the first printers compatible with iOS AirPrint without any issues like the other companies still have. My OfficeJet 6500A Plus works like a champ with my MacBook Pro, iPhone 4 and iPad.

      1. You’re kidding right? anyone who says HP makes the “best” Apple printers hasn’t tried any other printers. I had been using HP Printers almost exclusively for over 20 years. Then one day when my L7500 died after only about a year I “upgraded” to the 6500 and well that was enough to make me try something new and thank God it did. I now have an Epson printer and I NEVER knew printing could be so good. To be honest I had heard several of my PeeCee friends brag how their printers worked right out of the box – that never happend to me. With each new printer I would carry it around the house plugging it into each of my Macs trying to get them to recognize them. This new Epson was AMAZING. HP has been dead to me for a year, I think the market is just catching up.

        1. Epson was not stepping up to the plate to support their printers on Macs for some time, especially in the transition to OS X as I recall. Perhaps you were with HP at the time and hadn’t noticed. Epson has dropped the call, foot dragging, at other times, too.

          Their support of wireless printing for Apple products also dragged and were not a clean as HP.

          However, like you, I also like Epson printers. It’s just that I’m not going to blindlessly say how great Epson is. I’d been drooling for one of their top end pro printers for years, just waiting for certain upgrades which have now occurred. But, looks like I’ll be waiting a bit longer now…

  4. Die, DEll, Die and all the rest of the window junk computer sellers. HP if it does go under will be missed as it was a giant when I was growing up along with IBM. Nothing stays the same.

  5. It’s actually Microsoft that is “killing” Dell and HP. It’s Windows that makes their PCs into mostly indistinguishable commodity items. Customer make purchase decisions based mostly on price, because a PC from Dell or HP or any other PC maker (except Apple) is essentially the same; they all run Windows. And if it’s a fight for the lowest price, profit heads toward zero.

    They are trapped; if they “innovate” and try to make their PCs meaningfully distinctive, that adds to cost. If their PC model costs more, no one buys it because “it’s just another Windows PC.” HP tried to be bold by acquiring WebOS, but they lost their nerve and threw it away.

    Meanwhile, customers who buy Macs don’t make the decision based on price. Price is certainly a consideration, but the main reason a Mac is selected over a Windows PC is because a Mac IS “meaningfully distinctive.” Because only Apple makes Macs, Apple can balance profitability with affordability.

    So don’t blame Apple for being the only PC maker who does not rely on Microsoft to provide the customers’ user experience.

  6. “HP tried to be bold by acquiring WebOS, but they lost their nerve and threw it away.”

    Biggest mistake HP management has made in the last decade. The only salvation HP had was a competing technology wherein they had total control over the product. webOS was mature enough that HP could have developed a competitive tablet they didn’t have to immediately terminate.

  7. I see no future on Dell. The desktop market is slowly but surely disappearing. Where do they go? They sat on their laurels and do not have an alternate market that they can transition to. They have all their eggs in one dieing market.

  8. “Both of these companies had a game plan for a future devoid of tablet and cloud computing.”

    Isn’t the notion of a “game plan” for a future devoid of tablet/mobile/cloud computing something of an oxymoron? It’s like having a battle plan in place to surrender. Ceding the aforementioned market segments leaves HP and Dell with what, exactly, that can support a viable computing business over the long term? Stagnating desktop PC sales with their slim profit margins? A crowded server market and enterprise support services offered by any number of similar companies? I think we’re going to witness a very slow, drawn-out, painful and inexorable decline for both of these companies, ultimately culminating in an acquisition at a fire sale price (likely HP, with all its patents) and total demise (Dell).

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