Dell’s enterprise heft likely to shield blow from slowing PC sales

Dell Technologies’ focus on corporate clients is likely to shield the company from a slowdown in the personal computer market and help power upbeat quarterly earnings on Thursday, analysts and industry experts said.

Industry majors from Intel Corp to Lenovo Group have predicted a slowdown in PC sales in 2022 as runaway inflation cools demand after a two-year pandemic boom.

But with nearly half of its revenue coming from enterprise sales, Dell is poised to benefit from a trend of companies upgrading their equipment for the hybrid-work era.

“There is an ongoing shift to more enterprise-driven PCs and they also command higher margins,” said CFRA analyst Angelo Zino.

China’s Lenovo – the world’s largest maker of personal computers – earlier in August posted its slowest revenue growth in more than two years, while Samsung Electronics warned chip demand from PC makers would weaken further.

But global commercial shipments of desktops, notebooks and workstations are estimated to jump 16% sequentially in the third quarter, according to research firm Canalys, after a rise of 6.4% in the previous three months.

Still, Dell could face pressure from a stronger dollar, supply-chain disruptions sparked by recent COVID-19 flare-ups in China and the Russia-Ukraine war, analysts said. Reuters