Dell: Netbooks won't change shape of PC market

Company founder Michael Dell expresses doubts about the netbook form factor and discusses the company's push into services, as well as growing customer interest in green IT.
Written by Steve Ranger, Global News Director
Netbooks are unlikely to change the shape of the PC market, according to Michael Dell.

A number of hardware vendors, including Dell, have been unveiling their own versions of the ultraportable devices, but it seems Dell himself is not convinced by the form factor. When asked about the netbook phenomenon, Dell said: "I'm not that fond of the phraseology. If you look at screen sizes for portable computers, 85 percent of portable computers that run advanced operating systems are in the 14- to 15-inch screen space. What percentage will be 8.9- to 10-inch [screens] is hard to say."

"We have introduced a product there, but I don't think [netbooks] will be the massive growth factor in the industry. I think it's a second machine in developed countries and a first machine in newly developed countries," said Dell.

In a wide-ranging interview on Tuesday, the founder and chief executive of Dell also discussed his company's upcoming push into services.

Dell is planning to launch an expanded managed services offering in London soon, with a suite of services, including helpdesk support, available to customers.

"The services business for us is roughly a $7 billion [£3.8 billion] business. For every dollar spent on computers, companies then spend $2 to $3 on infrastructure services and support. When we sell 90,000 machines to a mining company in Australia, the opportunity is to attack that $2 to $3 and take over the systems management of that," he said.

However, this doesn't mean Dell is going to go down the same route as HP, which bolstered its services operation by buying EDS. Dell said he preferred smaller acquisitions that aid the company by the "network effect" of sharing skills.

"I wouldn't hold your breath for a really big acquisition," he said. "We have some pretty good history with organic growth."

Dell avoided the question of whether the company will move into making phones, saying only: "I think you will see smaller and smaller screen devices from Dell". He also noted that operating systems such as Windows Mobile and Google's Android have created the potential for disruption in the mobile arena.

The Dell chief pointed to where much of the future growth in PC sales will come from: emerging markets. "The PC is an echo of the cell phone, about three years after. If you want to know where people are going to buy PCs, go where they were buying cell phones three years before for the first time."

Dell added that there has been a dramatic increase in customers looking for greener IT hardware: "The thing I've seen change dramatically in the last 12 months is: a year ago, if you went to a chief information officer with a product that saved energy, they would say that wasn't their budget so not their problem, but energy costs have gone up so much they are being held accountable for energy consumption."

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