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Dell bullish on future of PC market, rules out smartphone play

PC giant looks for growth opportunities in emerging markets and SMBs

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It has been a rough year for the PC industry, with worldwide shipments declining 8 percent in the third quarter as a result of a weak economy and a move toward smartphones and tablets for more computing tasks.

Dell is one of the companies that has been badly hit, reporting an 11 percent drop in revenue year-on-year during the third quarter. Revenue from desktop PCs declined 8 percent in the period to $3.1 billion, while sales of “mobility products” – including laptops – fell 26 percent to $3.5 billion.

In spite of these setbacks, Jeff Clarke, vice chairman and president of Dell's Global Operations and End User Computing Solutions, remains bullish about the future of the PC industry. Speaking at the Dell World conference in Texas, Clarke said that the PC is still the preferred device for doing work because it drives productivity and content creation. 

“I look at the long term prospects of the PC business and I'm very optimistic. 85% of the world's population has a PC penetration rate of less than 20%,” he said.

“I look at the middle class as it grows over the next 20 years from 1.8 billion people to 4.9 billion people and the opportunity for PCs there. I look at the number of small businesses that we sell to today. The creation of small business continues at an unprecedented rate and serving that with PCs we still think is a huge opportunity for the company.”

Clarke said that the cloud computing and bring-your-own-device (BYOD) trends have led to a blurring of the distinction between personal devices and professional devices, creating new opportunities for Dell in the end user computing space.

In particular, he said, the arrival of Windows 8, combined with new form factors and capabilities like touch, is allowing people to use the PC in very different ways. Dell recently launched its first business-focused Windows 8 tablet – the Latitude 10 – which aims to enable productivity without compromising on security.

“We believe Windows 8 brings a lot to the tablet market. It allows us to put tablets in the hands of our customers with a form and a set of management tools they are very used to using,” Clarke told Techworld. 

“They know how to manage these things, they know how to secure these things, they know how to provision, they know how to deploy them. It's one of the beauties and advantages of a Windows-based ecosystem now that we have tablets there.” 

Clarke said that having a native touch operating system is hugely important for the class of devices that Dell builds and, in the long term, provides a reason to buy a new computer. Commenting on the business case for touchscreen PCs, however, Clarke said it will come down to whether they make employees more productive.

“The business side is still making its way from XP to Windows 7, and that migration will continue to happen for the next couple of years. I don't think you're going to see a major change in that, but you're going to see new applications of the technology or new deployments,” he said.

“I think there will be productivity associated with it. Particularly if you think what's coming in the future – you've got voice. Touch and voice, I think it's interesting.”

Despite the obvious shift towards mobility, Clarke was adamant that Dell has no plans to start making smartphones. 

“We've been really clear about smartphones – we're not going to do smartphones. We're not going to be in the smartphone hardware business. We're going to provide smartphone solutions, we're going to be the preferred BYOD provider of solutions in the marketplace,” he said.

“We will continue to take the assets that we have acquired over the past several years and build out a BYOD platform with Kace and Wyse and SonicWall and Quest technologies to be able to provide in the smartphone market answers for BYOD that will apply for our notebooks and tablets.”

Clarke said that software is the glue that brings Dell's solutions to life and, by having “advantaged” hardware, the software team is better able to differentiate. In particular, he said the acquisition of thin-client hardware and software company Wyse Technology earlier this year will help customers take advantage of “alternative” computing solutions. 

“The truth is, we're going to go and manage other people's stuff and help secure other people's stuff as well. My job is to make the edge devices more secure, more manageable, more reliable and durable, and do it in a way that the devices are attractive to bring in new users,” he concluded.



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