Dell's consumer business plummets

19 February 2013 by Steve Blum
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Apple delivers the buzz in Dell’s zone.

Dell’s fourth quarter 2012 financial results show a rapidly deteriorating presence in the consumer sector specifically and personal devices generally. Released this afternoon after Wall Street trading had closed for the day, the figures show a 24% decline in Dell’s consumer business and an overall decline of 20% in desktop and mobile device sales.

On the plus side, Dell says its networking sales are up 42%, its enterprise services business grew 6% and it’s seeing better PC results from large accounts – those numbers only dropped 7%.

Even though it’s still considered to be the one of three biggest PC makers in the world, founder Michael Dell saw the writing on the wall earlier this month. He announced his intention to buy back the company and take it private, eliminating the need for embarrassing quarterly reports and escaping immediate pressure from shareholders as he tries to figure out what to do.

It’s a tough spot to be in. Dell doesn’t have a sexy tablet or hot smart phones to offer consumers like Apple does, and that’s what they’re buying now. Its fading fortunes track with the troubles Microsoft is having with Windows, Dell’s operating system of choice.

Ubuntu’s Mark Shuttleworth claims that 10% of the PCs sold worldwide last year came with Linux onboard, albeit as a installable option rather than the primary operating system. That’s the sea change that Michael Dell has to navigate. The PC market is shifting toward generic products, based on open source operating systems and applications. If Dell has a future, that’s where he’ll have to find it.