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TheStreet Open House

Can Dell Buy Its Way Out of Irrelevance?

Stocks in this article: DELL GOOG AMZN AAPL MSFT RIMM

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.

At the time of publication, the author was long AAPl and held no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
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