I've been away and pretty busy but I wanted to do a quick note on Dell's Q3. This was obviously a strong rebound for Dell in terms of revenue and more importantly profits even though HP grew share faster than them. I think primarily this quarter their move to Opteron in servers has definitely helped them. I also think their focus on trying to move their higher margin products has helped somewhat. But long term I continue to remain concerned by their lack of new strategic direction.
Their growth in China also I think will come under threat over the next 3-4 quarters as Lenovo trains their sights on Dell. And HP will not be happy knowing that Dell is managing to grow in spite of the fact that they have wrenched the #1 spot from them. All in all, I think Dell will probably have a good Q4. But by Q1 Lenovo and HP will start to attack them in desktops & servers respectively. Which means unless HP gets their act together Dell does have a relative opportunity in the notebook business. I am doubtful their Q3 results were really helped by their move to Turion since that was much later in the quarter. I suspect what happened their is they had their sales people focus on selling up in what is a very rapidly growing category.
Thoughts everybody...?
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Sharikou180 said: This was obviously a strong rebound for Dell in terms of revenue and more importantly profits even though HP grew share faster than them.
But isn't performance against your competition the whole point? Acer grew 34%, HP grew 15% and Lenovo, 9% in units shipped.
Focusing on higher margins while losing market share isn't good for Dell. It only suggests that Dell has lost its ability to murder its competition through its efficiency and cost like it was doing only 1-2 years ago.
It was a good quarter for the industry and it's not clear if Dell deserves credit for it.
The Opteron pick up was a good decision to corner a segment with high margins and a good growth potential, but I'm not sure if it was worth the expense of losing Intel's (alleged) incetives.
180, you still look at this as if the consumer has a clue. HP is doing better because it idiot proofed its selection process while allowing greater customizability within each product line. Added to the fact that they have better product support, and you have a desktop scene that's really nice.
Dell is still using a very diverse product lineup, that idiot proofs itself with diversity that constrains choices, which is very consumer unfriendly. However, this works fine with laptops, and they still have better prices, and they have a better track record than HP with laptop safety. This explains their better laptop growth.
As for the direction, I think you're still too focused on the innovation deal, which to me, doesn't seem like it would matter. However, Dell does need to fix its product support and selection system, as it's very consumer unfriendly, and does not give upper tier customers the feeling that they're getting their moneys worth.
Dell seem to be doing much better. The only strange thing is that from where I'm standing they still seem to be heavily Intel biased.
At the weekend their latest TV ad in the UK has a Dell PC travelling along a conveyor belt. In the background you can hear a Salesperson speaking to a new customer, the Salesperson recommends an Intel Pentium for their needs. No mention of AMD.
In recent copies of the Sun (awful newspaper in the UK but has a large readership) Dell have been running a whole page of adverts. Each laptop / desktop was an intel chip, the page even had the Interl ViiW (is that correct ?) logo and again no mention of AMD.
The first three pages of PC world magazine in the UK is for intel. Again every single laptop / desktop had an intel processor and no mention of AMD.
At Dells UK website the Home laptops consist on :-
Home essentials - 2 amd, 2 intel
Entertainment - 1 amd, 3 intel
XPS & performance - 4 intel
Mobility - 4 Intel
Home desktops consisted of :-
Home essentials - 2 amd, 2 intel
Entertainment - 2 amd, 2 intel
XPS & performance - 4 intel
In each category Dell had flagged an Intel based machine as the "Expert Choice".
I'm not sure how Dell comes across in the US but over here they still seem to be mainly Intel with AMD as a cheap option.
The only strange thing is that from where I'm standing they still seem to be heavily Intel biased.
And they should be, they have Pentium inventory to burn!!
Hey sharikou 180 why dont you talk about the upcoming disaster which is the amd 4x4. All this speculation about the future and stocks is well and good but everyone loves to read about a train wreck before it happens.
There is a sneak though unofficial link on the 4x4 versus kentfield comparasion. http://pc.watch.impress.co.jp/docs/2006/1129/tawada92.htm
One thing to note is the power consumption comparison in which the 4x4 almost doubles the kentfield and provides inferior performance to boot.
All the amd fanboys aka sharikou and scientia wont talk about it so how bout you be the first.
Thanx.
One word of caution - I believe Dell did less stock repurchasing in Q3 (they stopped altogether in Sept?).
This will help EPS short term, of course as Dell is unable to report their Q3 earnings officially, it is not clear how much of a bump this gave them in EPS. I would be very careful with their financial #'s.
Also with increased # of SKU's through increase support of AMD products this may lead to some increase in overhead and pressure future margin and as one other poster noted with no "discount from Intel" (assuming there was one) that will also hurt in their compettion with the HP's, et al.
I have also heard that Intel killed most of the platform validation work they were doing for Dell so now it is up to Dell to do it.
The benchmarks are out can you comment about the 4x4 versus kentfield please all the AMD fan boys wont since they know its garbage.
To the UK poster mentioning various ad exposure, I too found it strange that Dell UK took a long time to push any AMD product in their ads, particularly in the newspaper ones (where they've been doing a series of "one day only" online offers mentioned in the newspaper ads [yep, not on the Dell UK home page - go figure!], often with annoyingly low volumes - like 20 machines only!).
If you pick up the Metro free newspaper, you'll see that it took them over a month to finally put *any* AMD machines in their ads at all. Then there was a further month where the ads would alternate between all-Intel or all-AMD and now, only in the last week or two, have Dell *dared* to actually mix AMD and Intel on the same page (shock, horror!).
Overall, the balance is still in favour of more Intel machines being advertised in the UK compared to AMD ones. I find it noticeable, though, that Dell are desperate to flog their fairly unattractive Pentium D line in particular (arguably the worst dual core processors ever made?) along with dubious Core Duo laptops, whereas most of the AMD machines seem to be X2 3800+ desktops and Turion (single or dual) laptops, which seem a better buy to me.
Me? I'm waiting for a 500 pounds quad core laptop, but I suspect I have about 3 years to wait for that :-)
All the amd fanboys aka sharikou and scientia wont talk about it so how bout you be the first.
I have no idea who you are. However, I'm baffled what it could be that you think I won't talk about. And, why didn't you just post this question on my blog? Or do you need to hide by staying anonymous?
I think he said it pretty clear if you actually read what he said instead of going out of your way to attack his anonymity; Quad FX sucks compared to QX6700. :D Expect some dabbling after December 5th on your blog. I'm giving AMD the benefit of the doubt 'til then, but so far, Quad FX has been a dud, Barcelona underwhelming, and 65 nm has yet to be seen.
I read tons of blogs and comment anonymously on the ones that do allow so. The others that require registration, unless there is a compelling reason, I do not put up with the trouble with registering.
To scientia,
I am guessing you will be posting/ giving a spin of how great the 4x4 is on your blog then. If so looking forward to seeing the crap you come up with to defend the 4x4 and its performance.
I dont post too many comments on your blog since i am interested in desktop performance and since AMD doesnt have anything there you are too busy talking about supercomputers and crap.
Dont want to register to talk about something i am not interested in sorry.
Are you honestly going to write in your blog that AMD just got owned with their 4x4 and come out clean with how they performed or are you going to whine about corrupt reviewers, pretty much everyone who did a 4x4 review, or some NUMA aware OS 30% increase in performance or some way that the almost 500 W power consumption is beneficial to the "enthusiast" if not please spare me the garbage cuz i have sharikou's site to read if i want more of it????
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