The Gradual Downfall
Abir is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Dell Inc. (NASDAQ: DELL) is an American multinational computer technology corporation founded in 1984 by Michael S. Dell whose success made him one of the wealthiest men in Texas. The company is one of the largest technological corporations in the world, employing more than 103,300 people worldwide and it is listed at number 41 in the Fortune 500 list. It is the third largest PC vendor in the world after HP and Lenovo. From its inception, the “Dell model” became synonymous with efficiency, outsourcing and tight inventories.
We all know that to make a position in this competitive world, technology and services should be upgraded from time to time otherwise holding a position becomes a big question mark. Dell boomed during the years in which companies refreshed their computers at a regular pace to keep up with faster chips and quickly evolving hardware. But many large organizations began to view the PC and its complementary software as static. In 2009, the decline in Dell’s sales proved so severe that its earnings fell to the lowest level since 2002. Therefore over the years it has been plagued by serious problems including declining sales, misreading the desires of its customers, poor customer service, suspect product quality and improper accounting.
The fiscal second-quarter results announced recently served as the latest reminder of the challenges facing Dell and other personal computer makers as they are unable to cope with the latest technology introduced by Apple (NASDAQ: AAPL) in their sleek devices such as iPad and iPhone.
Recently, the iPhone maker’s market value surpass the record set by Microsoft (NASDAQ: MSFT). Up to now, Apple’s shares have gained 64 percent, prizing it with a market capitalization of $623.5 billion, which is more that the Windows maker’s 1999 value of $620.8 billion at time of technology boom. So right now the tablet king has become the top technology giant and every gadget lover is expecting more and more from this king.
As Apple has created history, the Round Rock, Texas, company said Tuesday that profit for its fiscal period ended Aug. 3 plunged 18% as revenue dropped 8%. The company also projected another revenue decline for the current quarter and substantially revised downward its full-year earnings forecast.
"We're transforming our business, not for a quarter or a fiscal year, but to deliver differentiated customer value for the long term," Michael Dell, the company's CEO and founder, said in a statement Tuesday. "We're clear on our strategy and we're building a leading portfolio of solutions to help our customers achieve their goals." As a part of turnaround strategy Dell on Tuesday announced a new leader for its division that oversees many of its corporate products, including computer networking and data storage. Marius Haas is replacing Brad Anderson as president of Dell's enterprise solutions. Haas most recently worked at the investment firm Kohlberg, Kravis, Roberts & Co. after previous stints at Dell rival Hewlett-Packard and Intel.
As we know that the Round Rock, Texas based company listens to customers and delivers worldwide innovative technology, business solutions and services they trust and value must have to research a lot from the scratch to strive well in the heart of people. Michael S. Dell also told that they will go deep into the root of the problems and will prevent it rather than detecting.
Dell is hoping the upcoming release of Windows 8, a radical makeover of Microsoft Corp.'s PC operating system, will compel more people to buy devices that aren't made by the iPhone maker. But Windows 8 won't hit the market until Oct. 26, and many corporate customers probably will wait until next year before switching over to the new system.
abirk has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
