Can Dell do without PCs?

Michael Dell is set to reclaim his eponymous company from the stock market, allowing him to make the sweeping changes the company needs without the scrutiny and fear of triggering a collapse in the share price that comes from being a PLC.

Even this morning, The Times and others are speculating that one of those sweeping changes will be the end of PC manufacturing, allowing Dell to make an IBM-like transition into an enterprise hardware and services company.

It’s a plausible strategy, but an unlikely one, and one made all the more improbable by the involvement of one of the companies helping Michael Dell buy his own firm back: Microsoft. Steve Ballmer has agreed to lend Dell $2 billion to complete his buy-back, and it seems highly unlikely that Microsoft would have taken such a step without cast-iron assurances that Dell wasn’t about to completely undermine confidence in the PC market by pulling out.

If Dell was planning a retreat, I’m pretty sure Michael would have had to look elsewhere for a hand out

Indeed, Microsoft made the purpose of its investment abundantly clear in its statement on the loan: “Microsoft is committed to the long-term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future.” If Dell was planning a retreat, I’m pretty sure Michael would have had to look elsewhere for a hand out.

It is conceivable that Dell may exit the consumer PC market, focusing instead on businesses, where there are fewer credible rivals and few signs that customers are willing to forgo a new PC in favour of a tablet or smartphone, as they are in the consumer arena.

I hope that’s not the case, because Dell still has plenty to offer the consumer. Dell PCs, laptops and tablets are rarely breathtaking, but they’re dependable. If someone asks me to recommend a reasonably priced laptop, I invariably send them to Dell – and I’ve not had a single complaint yet.

Dell might not set pulses racing, but it’s the regular heartbeat of the PC industry.

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