If any company should fight the false perception that the PC is dying, it's Dell - and that's exactly what the company is doing at its annual analyst conference this week.
Dell's problem, as it were, is that going private took away the quarterly podium, driven by public reporting of financial results, to make key points. Until this week, the message that Dell PC shipments have been growing for the last five quarters was simply lost.
Over dinner this week with Jeffrey Clarke, Dell's vice chairman of operations and president of client solutions, I learned that Dell not only disputes the decline of PCs but intends to double down on its investment. Like many analysts, Dell sees the tablets-will-replace-PCs argument as BS that isn't backed up by how people actually use the devices.
Numbers Don't Lie - PCs Aren't Dead
We last saw this kind of silliness in the 1980s when everyone, including IBM, seemed to agree that mainframes were dead. Some firms even burned mainframes in their parking lots - which seem rather foolish in retrospect when they discovered that newer client/server platforms didn't perform as well. Decades later, Sun Microsystems, the biggest proponent and beneficiary of the client/server revolution is gone, while IBM's most profitable system is System Z - its mainframe.
Dell is to PCs today as IBM was to mainframes yesterday. Dell is aggressively trying to avoid the mistake that IBM made, in part by pushing back on this foolhardy idea. Clarke reports that, over the last year, Dell has tripled its shelf space while growing direct sales as well. China growth and penetration is significant, at 40 percent, and Japan mirrors this rate. Plus, 70 percent of new Dell customers are first-time PC buyers. All told, Dell reporting growth across the company, with its highest market shares in 22 quarters and growth topping its top five commercial PC competitors.
It's interesting to note that Dell's thin client growth runs at 30 percent, year over year, which means PC growth is strong enough to overcome thin client cannibalization. And all this is happening while tablet growth flattens. Tablets clearly aren't dying, but they aren't replacing PCs anymore, either. (Dell reports triple-digit tablet growth this quarter, albeit from a small base number.)
Dell's Little Touches Driving PC Growth
IBM discovered that the mainframe had to evolve rapidly. Dell is realizing this with PCs - and it helps explain why they show such massive growth. Dell has simplified interactions and implemented standard configurations, both of which improve the buying process. The company boosted monitor performance while driving down their price, making monitor upgrades more attractive and, with high-resolution screens reducing the need for a multiple-monitor workstation.
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