Dell says PC sales flat despite slow Windows 11 transition • The Register

Dell has predicted PC gross sales will likely be flat subsequent yr, regardless of the potential of the AI PC and the gradual substitute of Home windows 10.

“We have now not accomplished the Home windows 11 transition,” COO Jeffrey Clarke stated throughout Dell’s Q3 earnings name on Tuesday. “The truth is, in case you have been to have a look at it relative to the earlier OS finish of assist, we’re 10-12 factors behind at that time with Home windows 11 than we have been the earlier era.”

Clarke stated which means 500 million PCs can’t run Home windows 11, whereas the identical quantity didn’t want an improve to deal with Microsoft’s newest desktop OS. The COO due to this fact predicted the PC market will “flourish”, however then outlined the phrase as which means “roughly flat” gross sales regardless of Dell chalking up mid-to excessive single digits PC gross sales development over the past yr.

Dell can survive flat PC development as a result of its enterprise AI {hardware} portfolio is booming. The corporate booked orders for $12.3 billion value of AI servers within the quarter ended October thirty first, and shipped machines valued at $5.6 billion. Income from servers and networking equipment reached $10.1 billion for the quarter, up 37 % year-over-year.

“Our five-quarter pipeline proceed to develop sequentially throughout neo-clouds, sovereigns and enterprises, and stays multiples of our backlog, even when accounting for the sturdy demand we have seen,” Clarke instructed traders on the earnings name. “As anticipated, AI server profitability improved sequentially,” he added.

Consumers have gotten extra fascinated with conventional servers, too, typically to consolidate present fleets into denser rigs. Which means extra reminiscence and storage in every system, and a problem for Dell given the exploding worth of RAM and NAND, brought on by memory-makers shifting manufacturing to the high-margin merchandise wanted to assist AI workloads and decreasing manufacturing capability for extra anodyne equipment.

Clarke stated Dell will do “the whole lot we will to reduce the influence,” drawing on excessive provide chain administration expertise realized in the course of the COVID-19 pandemic and in newer months dealing with Trump administration’s quickly shifting tariff insurance policies.

“Our mannequin provides us large flexibility, whether or not that’s to reprice, how we set out quotes, whether or not that is to reconfigure, redirect to totally different merchandise, the power to find out how lengthy worth will likely be in impact, the power to grasp the place we will drive demand to and alter our demand era automobiles to drive that,” Clarke stated.

Dell reported $27 billion of income within the quarter, an eleven % year-over-year soar, and instructed traders to count on $31.5 billion in This fall and $111.7 billion in FY 2026, jumps of 32 % and 17 % respectively.

The corporate thinks servers will likely be an enormous a part of that enchancment, as a result of 70 % of its clients run 14th era servers and even older machines. Dell’s present machines are its seventeenth era and each replaces between three and 7 older machines – and has the next common promoting worth as a result of aforementioned improve in reminiscence and storage.

Consumers seeking to modernize their servers due to this fact want Dell to efficiently train its self-professed provide chain expertise, or revisit their budgets. ®