The article discussed the latest report of Dell that showed revenues decreased by 5.3 percent and net income fell by 31 percent. Due to the huge letdown in their financial report, the shares of Dell were trading 2.2 percent lower at $9.35 in New York today.
( http://nicosiamoneynews.com/2012/11/15/mobile-devices-spur-dell-contraction/ )
The recent report that I read in another article showing that a rising competitor, Lenovo, a Chinese company has been gaining more market share in the past few years and is just second to Hewlett-Packard. Dell is differentiated with its virtual integration that enables them to cut down their cost and gain the highest profit from each computer sold while satisfying the preference of different customer. But, recently Lenovo has created a higher level of cutting cost with its imitation of Dell’s vertical integration adding the advantage of cheap labor and supply of hardware, it enables them to have advantage in term of price. This benefit has given them the fame of PC firm with lowest or more affordable price in the industry.
At the same time, the trend of tablet has been grabbing the market of laptop and tablet is becoming a convenient and competitive substitute to laptop. The main advantage of laptop is being highly mobile while providing the same service. With the recent rippling huge tides of new tablets from several multinational computer hardware and electronics companies, a certain amount of market share of computer or laptop is moving to tablets instead. Dell has been reaping the profit for its usage of virtual integration for quite some years, but with so many new elements making the rivalry and competition more intense, should Dell search for ways to complement its current business model to compete against Lenovo? Another matter is, with so many computers, electronics, technology and software giants such as Microsoft, Google, HP, Amazon, Sony, Samsung and Asus tapping into the market of tablet, should Dell enter the market as well? Or should they focus on research and development to bring more innovative product that can edge against other firms?
