The profit margins on computers have become paper thin now that PC are no longer an amazing piece of brand-new, whiz-bang technology. That margin collapse happens to every type of technology once they become widely adopted i.e. TVs, calculators, microwave ovens.
Dell is desperate for new markets and has decided to enter the cell phone business….in China.
The problem for Dell is twofold: (1) cell phone profit margins are shrinking just as fast as PC profit margins and (2) China has some of the fiercest competition and lowest profit margins of any cell phone market i the world.
Dell may do ‘okay’ in the cell phone business but it isn’t going to return Dell to its 1990’s haydays.
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