Dell Inc. said Tuesday that the U.S. personal computer market has reached its low point but that the timing of a global turnaround in the technology industry remains anyone’s guess.
The pessimism sent Dell shares plummeting $1.04, or 8 percent, to $11.98 in afternoon trading.
At a meeting with Wall Street analysts, the world’s No. 2 PC maker elaborated on guidance it issued Monday, when it said it expects slightly stronger sales in the current quarter than in the last one. Despite these signs of improvement, Dell executives said Tuesday that many of the conditions that hurt the PC industry over the last several quarters aren’t easing.
Businesses have clamped down on technology spending and put off new computer purchases as the economic crisis persists. Consumers are more eager to buy new computers but are choosing cheaper models such as “netbooks,” which are smaller and less powerful than regular laptops.
“Certainly customers are elongating the life cycle” of their machines, Chief Executive Officer Michael Dell said.
Before the economic downturn, PCs were replaced after about three years, but now the CEO said, laptops are being kept for 3 1/2 years, and desktops for four to five.
The CEO said he expects a wave of replacements for aging computers to come in 2010, provided the economy has improved. By then Microsoft Corp. will have released its next operating system, Windows 7, which Michael Dell said should accelerate new PC sales.
“Large numbers of commercial customers completely skipped Vista,” the CEO said. He expects more interest in Windows 7, and not only because the cost of maintaining old computers will be rising.
“Windows 7 is a great product at this point, I’d say even a better product than Vista was at this stage,” he said. For instance, he pointed to the upcoming software’s improved power management and its “Windows…