Dell: PCs not under threat from tablets or smartphones

IDG News Service - The PC is not likely to be challenged by the tablet or the smartphone, and many users of the Internet on these devices will turn to the PC for a better experience, Michael Dell said in Bangalore on Monday.

If you were going off to college and could only have one device, you would choose the PC over a smartphone or a tablet, said Dell, whose company also sells smartphones. "If you could have two devices, then you would probably choose the phone before the tablet," the Dell CEO added.

Tablets are used in addition to smartphones, he said at an event organized by the Confederation of Indian Industries.

Dell's views echo those of research firm IDC, which said in October that it didn't see media tablets and other devices replacing PCs. Worldwide PC shipments increased by 3.6 percent in the third quarter of last year, compared to the same quarter in the previous year, the research firm said.

Dell reported in November that its revenue from mobility, which includes laptops and tablets, fell by 2 percent in the third quarter in comparison to the same quarter in the previous year. Desktop revenue fell by 6 percent in the quarter.

In some developing countries like India, however, the number of mobile-phone subscribers is far higher than the number of PCs, because they are priced lower, and also because communication is seen as more critical than computing, according to analysts.

When users get a taste of the Internet on 3-inch- or 4-inch-screen devices, they will like to see more, rather than viewing sites through "a peephole," Dell said. "So think of these small mobile devices as creating the next wave of users who will want larger-screen devices," Dell said.

The company plans some new announcements soon in the area of smartphones, he added.

Mobile-phone customers use a lot of data, which is boosting demand for data centers at the back end, providing a business opportunity for Dell to sell its servers, according to Dell.

The IT market requires hardware, software and services, which is the reason why Dell moved from being a hardware company to a software and services company as well, Dell said.

As the company shifts more to "solutions and services" and a strategy in the data center around having more intellectual property and building hyper-virtualized data centers, it requires a significant amount of organic investments and some inorganic investments, Dell said. "We use inorganic investment to go faster," he added.

Dell acquired last year a number of companies including managed security service company SecureWorks, cloud firm Boomi, virtualized storage vendor Compellent and networking firm Force10 Networks.

"You will see us be a serial acquirer using our strong cash flows to finance our growth and add to our development capability as we put on new teams," Dell said.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com