Dell on Monday gave a preview of its analyst meeting later this week and reaffirmed that it will aim to save $3 billion over the next three years and reduce headcount by 8,800.
In fiscal 2009, Dell said it will focus on its consumer, enterprise, notebook, small and medium sized business and emerging market businesses. In a statement, Dell, which largely reiterated prior forecasts, will also close its desktop manufacturing plant in
In a blog post, Lynn Tyson, VP of investor relations at Dell, said:
Over the last three years, driven by the massive shift in customer preference for notebooks - especially among consumers, industry forecasts for the rate of growth of desktops have declined from 10.8 percent to 3.6 percent. And the desktop to notebook mix in the U.S. has declined from a 70/30 split in 2005 in favor of desktops to a 50/50 split today. Our fiscal fourth quarter of last year reflects this change as we grew notebook units year over year by 37 percent and desktops by 10 percent.
Another interesting thread: Dell plans on "undertaking a strategic assessment" of its Dell Financial Services (DFS) unit, which provides credit to consumers and small businesses. The review may also include commercial leasing. Amid the credit crunch, many companies that have dabbled in offering credit to consumers are evaluating whether they want the risk on their books.
Dell disputed that its review has anything to do with the credit crunch. However, it's a little hard not to connect those two events. Tyson said:
First, our assessment of our DFS business is unrelated to what is going on right now in the credit markets - we completed the acquisition and so the natural next step is to pursue our strategy, simple as that. Many companies - GE and Target - to cite recent examples - often assess the ownership structure of their financing companies. In our case we are primarily evaluating three key things: (1) can DFS provide even better and most robust product offerings to our customers, (2) can we accelerate the investments we are making in DFS and, (3) are there more efficient ways to fund DFS. Our assessment may result in no change, or a sale to or partnership with a fully dedicated financing company.
Second, relative to our consumer financing receivables - less than 20 percent of our net customer receivables - or $1.6 billion - were to subprime customers. This percentage is similar to what it was in our fiscal third quarter. Based on our assessment of these customers financing receivables and the associated risks, we believe we are adequately reserved.
Separately, Dell filed its annual report. Among the notable excerpts: