Dell’s founder and CEO, Michael Dell, took another swipe at HP during his speech at Oracle Open World in San Francisco this week. Dell once again made it clear that his company had absolutely no intentions of abandoning the PC business, and said HP shouldn’t give up on theirs either.
“There are many reasons to stay committed to personal computing,” Dell said. “It seems these days not everyone is so totally committed… [HP] used to say the computer is personal again. I guess you might take that personally if you bought a PC from them.”
What are the reasons to stay committed? To keep prices down for your customers, explains Dell.
You see, while HP is making PCs, its immense buying power means it can enjoy lower prices from component manufacturers, which keeps the price of its other products down. Once it abandons the PC business, that buying power will reduce significantly, and component manufacturers will charge HP more. This will, of course, means HP’s products become more expensive.
Dell says 95% of processors, disk drives and other components go into PCs, with the remaining 5% going into storage and servers.
“Give up that scale and you need to raise your prices,” he added.
HP’s newly-appointed CEO, Meg Whitman, has promised to decide the fate of HP’s personal computer business by the end of October. However, it seems like its decision to drop the unit wouldn’t really be great option for anyone, and is likely to cause the company even bigger issues in the long-term.
Do you think HP should hold onto its PC business?