Dell: PCs Are Still Important to Business

 
 
By Jeffrey Burt  |  Posted 2011-09-19
 
 
 

Don't look for Michael Dell to jump on the "post-PC" bandwagon.

The PC market might be under significant pressure-from the rise of tablets and smartphones to the increased focus on software and services to the uncertain global economic situation-but consumers and businesses alike are continuing to buy PCs, with Gartner analysts predicting as many as 2 billion being in use by 2014. And Dell's CEO sees his company playing a key role in the market's evolution.

"There are a billion and a half PCs in the world, and while Gartner [analysts] change their estimates here and there, they also estimate there will be 2 billion PCs in the world by 2014," Dell told the Financial Times. "When I look at that, I think the idea that the PC is no longer here is complete nonsense. You see PCs, tablets, you see smartphones. But those other devices aren't necessarily replacing the PCs, so we are very committed to that part of the business, as part of this broader, end-to-end IT solutions company."

Dell is the world's second largest PC vendor, with a market share of almost 13 percent. It trails only Hewlett-Packard. However, HP is now looking to get out of the commodity computer space and spin off its PC business, a move that Dell said will have a sizeable effect on the market and open up opportunities for his company. Dell told the Financial Times that he was not interested in buying HP's business.

The world's third largest PC maker is Lenovo, which burst onto the international scene when it bought IBM's PC business in 2006.

HP executives have said they want to ditch their PC business in order to better focus on its enterprise offerings, particularly in software and services. Dell told the Financial Times that, like HP, Cisco Systems and others, his company is looking to become less a seller of computers and more of a solution provider to businesses, offering everything from software and services to servers, networking and storage.

Having a large PC business gives Dell the scale it wants when pushing everything from servers to storage to software to services, he said.

The PC market is continuing to see slowing sales, which analysts say have a number of causes. Those include growing sales of tablets and smartphones, as well as a pause in consumer sales after the refresh of the last year or so following Microsoft's launch of Windows 7. Analysts and vendors alike say corporate PC sales are still strong. There's also the uncertain economy, which is forcing consumers to hold back on purchases.

Both Gartner and IDC have revised downward their expectations for the PC market in 2011, and the ripple effect is being felt in other sectors. Gartner analysts have revised their projections for the semiconductor market in 2011 and 2012, due in large part to the slowing PC sales.

However, Dell is not the only top executive in the industry to talk about a strong future for PCs. During his keynote speech at the Intel Developer Forum Sept. 14, Mooly Eden, vice president and general manager of Intel's PC Client Group, noted that 1 million PCs are sold every day, and that that number is expected to grow.

"The question is, will people ... buy PCs?" Eden asked. "I say yes."

Eden agreed with Dell that while PC sales may be slowing in such places as the United States and Europe, they will continue to grow in emerging markets such as China and Brazil.

However, there is debate. Former Apple CEO Steve Jobs has said the industry is in a post-PC era, an idea that has been embraced by others, including Mark Dean, the CTO of IBM's Middle East and Africa unit, who was one of the creators of the IBM 5150 personal computer, which ushered in the PC era.

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