Unfortunately, Dell Is Staying the Course
However, I believe that all it would take is a strategic acquisition such as BlackBerry (BBRY), which Dell can own today for pennies on the dollar, to suddenly give Dell fourth place in device market share. This was precisely Microsoft's thought process when it recently picked off Nokia's (NOK) phone business.
Meanwhile, when was asked about Dell's position in a brutal PC market, where the company trails both Hewlett-Packard (HPQ) and Lenovo (LNVGY) in global sales, Michael Dell responded by saying, "We are the only ones that are growing scale, at least for the moment."
But "growing scale" -- however that is measured -- in a chronically shrinking market can only last for so long. Absent additional details to what he describes as "investments to enhance the customer experience," I can't say I have any confidence that Dell will emerge in better shape than it is today.
Plus, there's also the issue of the company's structure, which is, in my opinion, too scattered. Beyond the typical "executive speak," I don't believe Michael Dell has sufficiently explained how the company plans to execute its turnaround. Nor has he offered any hints as to how the company plans to shed its overreliance on the dying personal computer business, which led to a 72% profit decline in the recent quarter.(IBM), EMC (EMC) and Cisco (CSCO) all provide these services, and in some cases they do it better. Not to mention, they are better managed and have already made significant improvements in these same areas. Essentially, not only would Dell need to outperform these rivals, but it would need all three to stumble in order for it to gain any sort of meaningful share. What are the odds this is going to happen? The good news is the company will no longer have to disclose to the Street how bad things really are. At least the long suffering of shareholders has been put to an end. I just don't believe their patience was worth it. At the time of publication, the author was long AAPL. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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