Dell sees light at end of PC tunnel
Tuesday, 4 Aug 2015
Stefan Zaklin | Getty Images
The PC's fall from popularity helped drive a hard-hit
Dell to take itself private, but the computer maker now
sees some signs its business there is turning around.
"We're seeing that a lot of the smaller players are leaving, which is
giving us a bigger opportunity to go after that market," said Peter
Marrs, vice-president of enterprise solutions for Asia-Pacific Japan
at Dell. "The market has been declining here in Asia, but we continue
to grow faster than the market."
Sony, India's HCL Infosystems and South Korea's
LG are among the players leaving the PC business or at
least scaling back, he noted.
Sony sold its PC business, VAIO, to investment fund Japan Industrial
Partners in 2014, while HCL said in 2013 it would gradually phase out
PC manufacturing. Samsung stopped sales of laptops in Europe last
year, while LG said early in 2014 it would leave the "traditional PC
In 2013, Dell Chairman and CEO Michael Dell secured shareholder
approval for his $25 billion offer to buy and take the firm private
after a drawn-out battle. The company was once at the top of the PC
business, boosted by its pioneering model of allowing customers to
order custom-configured PCs online, while working closely with
suppliers to keep costs low.
But the company, which was getting most of its revenue from the PC
business, ran into sharp headwinds as PC prices fell and its
customers' tastes shifted toward tablets and smartphones.
Dell has around 14 percent of global PC market share, ranking third
globally in the second quarter of 2015, after HP and Lenovo, according
to data from Gartner. But globally, PC sales are still falling, with
only around 251 million desktop and laptop units, or around $151
billion worth, expected to be sold this year, down from around 343
million, or around $218 billion, in 2012, Gartner said. Around 31.9
million units, or around $18.2 billion worth, are expected to be sold
across emerging and mature Asia and greater China this year, the data
The PC business in Asia so far appears to be avoiding one of the
pitfalls seen in developed markets: companies encouraging using
employees to use their own devices such as personal laptops and
smartphones, rather than investing in capex.
"Probably in other parts of the world, you see more of that, but I
think here in Asia, we still see the normal deployment of
company-owned assets and PCs," Marrs said. "Bringing your own device
in, like a laptop, is a security and manageability concern."
But Dell is not putting all of its eggs in the PC basket.
Outside of the PC segment, the company has been seeing a lot of
growth, as taking the company private has allowed decisions to be made
more quickly, Marrs said, noting the company is hiring 300 sales
people in Asia.
"It's almost like we're a startup," he said. "Everything we're doing
around making investments is much easier," he added, noting Dell has
made around $18 billion worth of new investments in software and
hardware companies over the past five years.
Marrs noted the company has seen "double-digit growth" in the server
business this quarter, driven by sales related to cloud and other
infrastructure. Dell is also focusing on its software and consulting
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter
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