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Expect Dell To Make A Comeback
Posted February 1, 2012
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By Jacob Steinberg
Dell (DELL) is one of the World's largest hardware producers. Based in Texas, the company employs over 100,000 people and it is ranked 41st in the Fortune 500 list. In the recent years, Dell's stock performance did not impress anyone, and it surely did not make the company's investors very happy. Apple's (AAPL) recent gains of market share in computers and rising popularity of tablets played a role in Dell's decline. In addition, the company got heavily criticized for staying in a business (i.e., hardware) with very low profit margin.
Despite all this, I don't believe things are looking that bad for Dell. First of all, I believe that the threat of "Applemania" on Dell is overestimated. It is true that Apple is enjoying a great success and good amount of growth right now, however it should be noted that Apple and Dell might have completely different audiences in front of them. Apple's target audience is individuals who have plenty of disposable income to spend on expensive toys, whereas Dell's target audience is companies, libraries, hospitals and other organizations that buy many computers at once, in addition to individuals looking for cheaper computers. While it is common to hear that Apple will steal all the customers from PC manufacturers, many investors and analysts seem to forget the fact that not everyone in the world can afford Apple's expensive products. READ FULL ARTICLE HERE
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