Dell and HP report that sales are increasing, but the outlook may not be so rosy
- Dell and HP both expect poor sales growth in the coming quarters
- Computer giants say the outlook for the consumer PC market is dim
- However, a shift to AI PCs could signal a change in prospects
Two of the world’s largest PC makers have indicated they are cautious about growth in the coming months as demand for new devices declines.
Despite most recent quarterly revenue increasing 10% year-over-year to $24.4 billion, Dell is now predicting that sales will stagnate around $24-25 billion in the next and final fiscal quarter, with much of the uncertainty coming from weak consumer demand.
PK too announced quarterly revenue was down 0.3% year-over-year, with CEO Enrique Lores stating that the company is preparing to “capitalize on the commercial opportunities” given the same weak consumer demand it is also facing.
HP and Dell are having a hard time
Together, the two companies account for more than a third (35.2%) of the global PC market (via Channels), putting them in second and third place. In first place is Lenovo, which saw quarterly revenue rise 24% year-over-year earlier this month. It covers almost a quarter (24.8%) of the market.
For HP, the sales decline was strongly influenced by a decline in Consumer Personal Systems sales, which fell by 4%. In that regard, Commercial Personal Systems sales increased by 5%, highlighting the strong business-to-business market.
Dell’s Consumer Client Solutions Group’s revenue fell a more worrying 18%, while its commercial counterpart rose just 3%. The commercial activities are also about five times larger than the consumer activities in terms of monetary value.
COO Jeff Clarke said artificial intelligence, an emerging technology that shows “no signs of slowing down,” represents an opportunity for the company.
While the outlook may not be great for the two companies, research firm Canalys believes there will be “modest” growth in the consumer market during the holiday season, with companies forced to make promotions.
Following the disappointing news, shares of HP fell 8% in extended trading, while shares of Dell fell 10% in a sign of lost investor confidence.