Microsoft Surface Tablet

Responding to analysts’ inquiries, on a Dell second-quarter earnings conference call, Michael Dell (CEO) and Brian Gladden (CFO) commented on the upcoming Microsoft Surface tablet release. Relatively speaking, neither executive saw Microsoft attaining much market share this year. Gladden also commented on the over all weakness in PC sales due to the introduction of tablets, smartphones and the economy in general. He also hinted at Windows 8 products in Dell’s pipeline.

In reply to how the Windows 8 Tablets will impinge on company revenues Mr. Dell said, “I think there’s an understanding of the number of units that they’re likely to sell is a relatively small percentage. Maybe in the one to two percent range of total PC units during next year.” Concerning the competition the Microsoft Surface tablet will pose… Mr. Gladden maintained, “Microsoft entering the space — we’ve spent time speaking to Microsoft and understanding how they’re thinking about it. There clearly are opportunities for us as Windows 8 comes through and how we differentiate our products.”

When questioned about Dell’s product pipeline Gladden sustained, “At the same time they’ve announced the Surface product that will be in that space and we’ll have products in there. I think you’ll see a diverse set of offerings that take advantage of what Windows 8 brings to market.” In directly competing products to the Windows 8 Tablets and other mobile devices, Gladden had this to say, “We’re positioned to be a leader in addressing emerging BYOD (Bring Your Own Device) trend with…our upcoming tablets and converged devices. You’ll see new Windows 8 ultrabooks, all-in-ones, tablets, converged devices in the fourth quarter and headed into next year.”

On the current state of the market, Mr. Gladden went on… “The desktop and mobility business was down 14 percent…in a challenging environment. The revenue deterioration was above anything we expected. We also continue to see discretionary spending directed to alternative local devices like tablets and smartphones.”