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Dell-icious?
By Ian Cooper
As I’m sure many of you have already heard, Michael Dell is now the CEO of Dell. There’s a positive and negative to this. One, with Michael Dell now in charge, the cogs of the machine, which have seemed to have acted independently of one another, may now be unified to work as one machine – not several. Second, do you really think Michael Dell would step back in if he didn’t think the company could be turned around? No. He must not think things are all that bad if he’s stepping in now.
And it’s not as if Kevin Rollins didn’t have it coming. The Street’s been calling for his head for a few months now even with Dell constantly saying that the company would never do such a thing.
The negative – even with Michael Dell’s assumption of the CEO role, it doesn’t change the increasingly difficult and very competitive PC market. And while they did announce that earnings would be less than stellar (not surprised at this point), which fleshes out earnings negativity, we could see further weakness until accounting glitches are cleaned up. Plus, with the departures of the CEO and the CFO, coupled with the possibility of massive accounting restatements, let’s hope Dell has hit the ground running and has a plan.
Elsewhere, there’s word on the Street that Dell could enter the even more competitive slit-throat industry of gaming. According to Engadget.com, “The worldwide head of gaming for Dell, Abizar Vahkaria, was recently asked by UK publication PC Plus whether Dell was planning to release some sort of gaming-oriented handheld, to which Vahkaria replied: ‘You know, that's definitely one that's on the radar screen, but we have no plans to talk about anything today.’”
But why would Dell want to take this venture considering its still struggling with market shrinkage? It’s still too early to even guesstimate what a Dell handheld would look like. But it’ll have to compete with the wildly popular PSP and iPod to succeed.
Take care,
Ian L. Cooper, Editor, Early Alert Trader