Dell World 2012: Vendor claims PC business faces biggest threat from smartphones

News 13 Dec, 2012

Dell will continue to make money from PCs, but president of software says the firm need to look at other avenues.

Dell continues on its quest to reposition itself as a software provider, and claims that smartphones are eating into PC sales more so than tablets.

Speaking at Dell World 2012, John Swainson president of software at Dell admitted that the PC business was struggling and that Dell has “a branding issue”.

“It is tricky because the PC business is struggling and it is probably going to struggle for a while until it rebalances itself. [It is not a huge source of growth] but we can find growth in places like servers and storage and networking and software and services instead," he said.

Swainson claimed that one of the firm's priorities is to get customers to think of Dell as "more than just a PC business".

“[The] Dell brand is well recognised and well regarded, generally speaking and it is not a crazy leap for people if you say [you are from Dell and work in software]. Once they get over that [initial surprise], they can see why it makes sense and the stability that Dell brings to some smaller companies is a significant advantage."

We are the most efficient PC producer in the industry, so we should be able to make money in that business.

Despite Swainson claiming that he did not believe the company should simply abandon its hardware roots in favour of software and services, the firm shows no signs of re-entering the smartphone market. Dell discontinued its 5in hybrid Android device, the Streak, in 2011 after it failed to take off.

Instead the firm will continue to focus on Windows-based machines.

"[PC unit sales are] something like 350m per year. That is not going to zero, or get cut in half. Some percentage of that will turn into tablets but not all of it, and all the data says the smartphone business is incremental to that,” he continued.

“So there is still going to be a big PC business ... and we think we are the most efficient producer in the industry, so we should be able to make money in that business."