Dell is experiencing hell right now, as the PC maker’s second quarter revenues slipped by 8%, a performance that was much worse than anticipated. Revenues totaled $14.5 billion, down from the $15.7 billion it made in the second quarter of 2011, and with third quarter revenues also expected to drop, things aren’t looking good at the minute.
The biggest problem that Dell faces is that it’s so heavily reliant on PC and laptop sales – which account for roughly 50% of its total revenues. The US firm has been attempting to diversify, making a range of acquisitions to add storage hardware and software to its product offerings, but CEO Michael Dell’s strategy has been unable to offset the market’s shift away from PCs.
In addition, Dell is struggling in the face of a strong challenge from Asian brands such as Lenovo and Acer. Lenovo particularly, has been very aggressive in countries such as China, Brazil, Russia and India, where Del saw revenues drop by 15% in the second quarter.
There is light at the end of the tunnel for Dell however; the company recorded an increase of 6% in its enterprise solutions and services revenues to $4.9 billion, while its server and networking arm saw revenues grow by 14% in the same period on the back of strong sales of its Power Edge servers.
Dell continues to see enterprise as the way forward, as this is one sector in which “demand remains solid”, according to their CEO. The company insisted that it would not change its strategy as it announced the appointment of ex-HP networking leader Marius Haas to run its enterprise arm and develop its global services. In addition, Dell plans to complete its acquisition of Quest sometime in the third quarter, something that should help its revenues to stabilize.