Dell warns global IT downturn on the way

16 Sep 2008

Computer giant Dell has warned that conservative IT spending, which began in the US, has spread to western Europe and several countries in Asia, and says it is seeing further softening in global end-user demand in the current quarter.

In a statement prior to an address to Dell executives at a Bank of America conference in San Francisco, the company said it will continue to execute against its five growth priorities of global consumer, small and medium business, enterprise, notebooks and emerging countries.

In recent weeks, Dell revealed it is considering a plan to sell its manufacturing operations around the world to contract electronics manufacturers (CEMs) to enable it to cut costs. Dell has also reported disappointing quarterly profits recently, which sent shares tumbling more than 18pc.

The company said it expects to incur costs as it realigns its business to improve competitiveness, reduce headcount and invest in infrastructure and acquisitions.

Dell said it is committed to working aggressively on cost initiatives that will benefit its profit-and-loss book over time, with improved growth, profitability and cash flow.

Dell said it grew its unit shipments faster than the industry in the first half of 2008 and expects to grow faster than the industry for the full year.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years