Can Intel (INTC) And Dell (DELL) Both Be Right?

Dell (DELL) delivered a pessimistic forecast about it recent sales and the short-term period ahead, indicating that the PC market is still in trouble. A number of industry analysts expect global computer shipments to drop 5% or more this year.

About 24 hours after Dell’s unpleasant news, Intel (INTC) was remarkably sanguine.  “While the global economic environment is still recovering, our customers signaled increased confidence for a seasonal second half with their ordering patterns,” Intel Chief Executive Paul Otellini said in the company’s earnings call after releasing better-than-expected numbers. “From a consumption perspective, consumer purchases led the way.”

Something is wrong. Intel, the largest chip supplier in the world, and Dell, the No.2 PC company, cannot both be right about the future.

The answer to the puzzle may be that Dell is still losing market share. Recent information from research firms IDG shows Asian companies including Lenovo and Acer picking up sales much faster than Dell by aggressively launching netbooks and improving sales in China and other emerging markets.

Intel’s sales to Lenovo, Acer, and netbook upstate ASUS appear to be overwhelming any trouble at Dell. Market share numbers for June may show the US company’s share around the world is dropping rapidly, and that is the real story in the PC industry.

Douglas A. McIntyre