This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Dell Should Buy RIM or Die

NEW YORK ( TheStreet) -- For all the talks about the death of the PC, conversations that I've considered grossly premature, it seems that the prolonged struggles of tech giant Dell (DELL) would suggest that this morbid chatter may actually be right on time. For a company I have always wanted to give the benefit of the doubt, it is getting progressively difficult to ignore that the "lights at the end of tunnels" could be those of an incoming train.

As its most recent quarter would suggest, these lights are now coming from both directions; Dell's best option might be to change tunnels altogether. In other words, it needs to shift its focus and possibly rethink its strategies.

Dell needs to make a move to remind Wall Street that not only does it still have the competitive spirit, but it is determined to take back that which was stolen from it -- its growth. It can do this by acquiring Research in Motion (RIMM) and announcing its presence in the mobile device market to compete with the likes of Apple (AAPL) and Google (GOOG), and firing a revenge shot at its OEM partner Microsoft (MSFT). Its life now depends on it.

In the company's second-quarter earnings announcement, investors learned that for as bad as things once appeared for Dell, things just may actually be getting worse. Even more disappointing is that it seems the company's management just can't find the right mix to fix its problems.

For the period ending in July, Dell said it earned $732 million, or 42 cents per share, on revenue of $14.5 billion. Excluding costs, the company said it would have earned 50 cents per share. While the company would have topped analysts' estimates of 45 cents, the numbers still represent an 18% annual decline from the $890 million it earned last year. What's more, its revenue figures also fell off by 8% from the same period of a year ago -- falling short of analysts' estimates by $200 million.

Dell continues to show a considerable amount of weakness, not only in its mobility division to the extent of a 19% year-over-year decline, but its PC business also fell 9%. Even more concerning is the fact that revenue actually dropped 14% annually when combined both desktops and laptops -- lending further credence to the notion that PCs are dying in favor of tablets and mobile devices.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs