Dell being left behind as PC market re-energizes itself?


Dell, Inc. (DELL) has been beaten up verbally recently, and its stock price has plummeted as well. The company's latest quarter was nothing to write home about, and there is talk that Dell's edge has long since been dulled and the company is a lumbering giant unable to do anything more than sell and service commodity products. The recent Perot Systems acquisition is more a defensive move than an offensive one, for example. So, is Dell floundering? In many ways, definitely yes.

If a recovery in the PC market is indeed underfoot, does Dell risk being left behind as Acer continues beating up on it and Hewlett-Packard (HPQ) marches forward with its $100 billion annual revenue machine? Dell's mainstay is business sales, and a 23% drop year-over-year to large businesses won't sit well.

What is Michael Dell to do? Entering the uber-competitive smartphone space will likely be a blip for the company. But, the company could continue to maintain itself with corporate sales even as it gets beaten to a pulp in the retail PC space. The U.S. economy is recovering and PC sales to both consumers and businesses will recover along with it. If Dell sees another quarter of sluggishness, investors will be asking for blood. Another few quarters and they'll be screaming for it. By then, Dell's turnaround (which never really started save for entering retail) will be stuck in reverse.

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