Dell Targets Logistics As Sales Challenge Amid Chip Shortage Crisis

In addition to presenting the results for the third quarter of its fiscal year 2021, which concluded on October 29, in Dell Technologies They have also shared their impressions on various current affairs, among which is the Market situation, which is experiencing difficulties due to the crisis caused by the shortage of chips worldwide. But also because of other obstacles, such as problems in certain areas of freight transport.

Computer sales continues to be the most important business area for the company, according to The Register, with significant growth in sales to businesses recorded in the quarter, ending previous concerns about equipment shortages and rising of prices. Dell has registered a year-on-year increase in revenue of 21% to 28,394 million of dollars. Its Customer Solutions division had $ 16.5 billion in sales, up 35%. Of these, 12.3 billion dollars came from the sale of business PCs, which represents a 40% increase year-on-year. Another $ 4.3 billion came from consumer PC sales, up 21%.

On the other hand, Dell’s Infrastructure Solutions Group, the other major leg of Dell’s business, had revenues of $ 8.4 billion, up 5%. Those of Storage grew 1% until the 3.900 million dollars, and those of Servers and networks 9% until the 4.500 million dollars.

One of Dell’s COOs, Jeff Clarke, has stated that «roughly 80% of industry revenue and nearly all industry revenue growth has come from business PCs and high-end consumer PCs, and that’s where we’re focused«. Clarke also recalled Dell’s limited exposure to the consumer sector, as it has traditionally always been more focused on the professional and business market.

According to Clarke, teleworking and studying from home, «hybrid worker usage pattern“, the “re-entry of workers back to the office“, as well as “the arrival of Windows 11 and an installed base of equipment with some antiquity»Leads to current demand. At Dell they believe that this growth in demand will continue throughout the coming year.

This is not to say that component shortages will not continue to seriously hamper all technology makers. Dell also has problems for it, although thanks to their scale and the extensive relationships they have in the supply chain, they manage to cope with it. In addition, Clarke notes that consumers have a good understanding of demand dynamics, which have led the company to go through “the largest quarter-to-quarter cost increase we’ve ever seen«.

Dell is currently following 27 categories in its product portfolio. Among them are codecs, sound amplifiers, sensors and microcontrollers. And although supplies are still a challenge, now what is giving the company the most headaches (and it is not the only one) is the transport.

Clarke assures that «the problem for us is the logistics costs, which we continue to work on. Today’s logistics cost environment is very complicated. The current cargo, the next guided charter, the fact is that we are shipping more things and that we have changed from less ocean to more flights. That combination of things, ensuring that we understand these entry costs in our pricing models, I think is clearly the challenge that we faced in the fourth quarter.«.

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