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UnDELLightful profits

February 22, 2012

US computer manufacturer Dell is struggling with competition from Apple and other tablet makers. The company reported a drastic decrease in fourth-quarter earnings due to weak consumer demand.

https://p.dw.com/p/147NR
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Image: Fotolia/dell

US computer maker Dell has posted an 18-percent drop in fourth-quarter earnings due to sluggish consumer demand. The company said it earned only $764 million (577 million euros) in the final quarter, down from $927 million in the same period a year ago.

Consumer revenue dropped by 2 percent as large numbers of customers continued to swap conventional PCs for Apple's iPad or tablets from other producers.

But the picture differed considerably in Dell's various markets. The company did well in the Asia-Pacific region and Japan where sales grew by 10 percent, including a 15-percent surge in China.

Relying on service

Thanks to Dell's customer service activities, overall Q4 revenue increased by 2.2 percent to $16.03 billion.

But because of the marked drop in earnings, Dell shares initially fell by some 5 percent in late trading. Investors were also disappointed by the computer maker's announcement that it expected its turnover in the current quarter to drop by 7 percent.

According the market researcher Gartner, Dell is the world's third-largest computer producer behind Hewlett Packard from the US and Lenovo form China, which took over IBM's PC business in 2004. If iPads were counted as PCs, the global leader in production would be Apple.

hg/ai (dpa, Reuters)