Dell downbeat forecast proxy

SvenS:

It's certainly an interesting topic. There has been a lot of negativity in the traditional PC industry for a while now since mobility in computing and easy access to the web and now apps and such has become an increasing trend and threatens the growth prospects of the industry. I'm certainly no expert on Dell though but personally I have always liked their machines both PCs and servers. Let's be honest though, Dell hasn't done that much since the tech bubble burst. Sure the stock moved up well between the bust and late 2005 but since late 2005 it has been on a general downward trend. Was this not expected though? As technology progresses the platforms we use as consumers can become smaller and smaller while still becoming more powerful and particularly more user friendly when utilizing simpler operating systems like Mac osx. The PC makers realized this was a new area that would need to be addressed as even traditional laptops were beginning to be viewed as "large". Dell and other makers started launching netbooks which used more basic hardware but were purposed to interface through GUIs which enabled the netbooks to shift all the processing requirements to data warehouses. Of course Apple came out with the iPad and basically killed the netbook market though. My point is that the PC business has been in trouble for a while now and I'd say most long term investors, please correct me if I am wrong though, have steered clear. I think Dell still does fairly well on the server and non-PC side as well as larger institutional purchases of PCs but I don't view Dell as a growth company. Perhaps it is a dying industry at least compared to the "roaring 90s" but it might provide a potential value play in the future. For me though I'd prefer to sit on the sidelines and observe for the near future.

Agreed. Dell has done absolutely nothing in terms of the user end experience and keeping up with the times. They're worse than Nokia/BBRY in my opinion, because at least those two companies recognized the need for change and have tried it. Dell hasn't released any real mobile hardware and as a result has suffered. I definitely think that the market has priced it in (well, back before the LBO was announced) and most people, as you said, are looking for a value position in the future.

I think that if they can come up with some innovative ideas for the mobile space, they can come back. There is no true leader in terms of non-iOS tablets. There is some heavy competition between the surface pro and other similar devices, but no one device truly sticks out in that market. Their server and non-end user computing businesses are doing fairly well, but one of Blackstone's current proposal is to split off Dell Financial Services to GE, which I think would be a mistake. Dell needs all the help it can get from its non-core businesses.

It'll be interesting to see how this plays out, though. It's almost an RJR Nabisco, haha. At least in terms of the drama surrounding it!