Dell Takes 14% of Global PC Market

Ironically, HP is separating its PC and PC-related business from its enterprise operation, just as Dell is trying to bring two similar businesses together.

The global PC market remains huge, even if it is shrinking. Third-quarter shipments totaled 73.7 million, off 7% from last year, according to research firm Gartner. Among PC companies, Dell was the only company that held its own, with an increase of 0.5% to 10.2 million, compared to the third quarter of last year. Apple Inc.’s (NASDAQ: AAPL) shipments moved higher by 1.5% to 5.6 million.

The future for PC sales is not as troubled as the recent past. Gartner analysts wrote:

While 3Q15 results illustrated gloomy market conditions for the PC market, there is a positive aspect in the results. According to Gartner’s 2015 personal technology survey, 50 percent of consumers expressed intention to purchase a PC in the next 12 months, compared with 21 percent for tablet purchase intention.

The Dell numbers point out its limited success as a private company. They also highlight why Dell needs EMC. As Dell’s major business slowly falters, it needs a hedge, and in EMC it gets a large one. Primarily an enterprise storage company, however, EMC is not in good shape. Its revenue was $24.4 billion last year, which was little better than the year before. Net income was $2.7 billion, which means EMC is hardly a high-margin business.

The slow growth has continued this year. In the second quarter, revenue rose only 2% to $6 billion. Earnings were $0.25 per share, down 11% from the same quarter a year ago.

No matter how the EMC merger attempt turns out, Dell needs to find a way to accelerate growth soon. If it cannot, Dell will show why it was not viable as a public company. The trend of its sales would have caused it to take the beating it does not have to take in its present ownership configuration.

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