Can Dell Buy Its Way Out of Irrelevance?
The justification for this deal comes from the company's most recent earnings report where it continues to show considerable weakness in its mobility division -- a 19% decline year-over-year. It also got confirmation that its PC business is running "out of memory" and a "reboot" is not possible. That segment fell 9%. Even more concerning is the fact that revenue actually dropped 14% annually when combined both desktops and laptops.
Mobile devices are winning and Dell needs to get in the game.
Gone are the days of PC domination in the mid-to-late '90s. This is a new era where the leaders are now Apple, Google, Amazon and Samsung. It was precisely this reality that I believe caused Microsoft to want to forge a partnership with Nokia (NOK) while also recently announcing its Surface tablet.
For these reasons, buying RIM makes more sense for Dell than any further acquisitions in software and services that will add little to its bottom line while only prolonging its irrelevance.The company has spent billions over the past several years acquiring companies that have done little to lift its profile above boring. It is time that it realizes that if it truly wants to matter, it needs to do something radical. Dell needs to buy RIM and get in the game. While it will not guarantee that it will be able to beat Apple and Google in the device sector, at least it will matter again. Follow @rsaintvilus At the time of publication, the author was long AAPl and held no position in any of the stocks mentioned. Follow @rsaintvilus This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV