The mobile industry has seen some radical changes due to the rapidly rising rate of innovation in mobile technology. Some of these shifts have also incurred some casualties such as Dell and Texas Instruments, who have all but exited from the market citing intense competition. Dell chose to transition into a full service business solutions provider, particularly for smaller clients that IBM and Cisco shied away from, while TI simply stepped out of the mobile chip industry, despite having helped pioneer the industry with its OMAP SoCs.
However, these changes may not have been enough for Dell. Its ‘mobility’ business unit posted a 26% dip in revenue at $3.5 billion and the company saw a total quarterly revenue drop of 11% to $13.62 billion. Consumer revenue suffered a drop of 23% while sales revenue was hit by nearly 8%, bringing its total profits down by nearly 47% to $475 million. Dell may have chosen to exit the smartphone industry owing to the fact that while their mobility division contributed less to its revenue than last year, dropping from 31% to 25%, its desktop computers actually increased their contribution to revenue, having jumped from 22% to 23%.
The company had banked on the holiday season to turn their recent misfortunes, attributing the dip in sales to consumers delaying their decision to buy expensive gadgets over the possibility that consumers outright weren’t planning on buying a new PC. Even if Windows 8 raised the demand for computers, the sales figures don’t show anything noteworthy. Even with expected increase in sales, Dell expects to earn anything between $14 billion and $14.4 billion, which is 10% lower than last year and even lower than analysts’ estimate of $14.5 billion.
