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Dell’s next move

Sam Eaton Aug 18, 2006
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Dell’s next move

Sam Eaton Aug 18, 2006
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TEXT OF STORY

SCOTT JAGOW: I guarantee the folks at Dell are saying TGIF. It’s been a bad week for the world’s largest computer maker. First, the recall of four million laptop batteries. Then Dell turned in a profit report that was pretty painful yesterday. And the company said the SEC has been looking into potential accounting problems. Sam Eaton has more.


SAM EATON: On the tail of announcing the biggest electronics recall in US history, Dell coughed up second quarter earnings that show the slowest growth in three years for the computer giant.

Net income fell to about $500 million, just under half of what it was a year ago. But that’s not enough to send analysts running. Rob Enderle of the Enderle Group says this former star among computer maker’s still has some shine despite this week’s string of bad news.

ROB ENDERLE: While this may be more than just a little blip, for now it does still just look like a blip on the radar screen that they should pull out of.

Enderle says Dell now needs to focus on the good things it’s doing.

For one Dell is introducing AMD computer chips into its lineup, bringing an end to an exclusive deal with Pentium chipmaker Intel.

And as online computer sales slump Dell is setting up retail centers, called super Kiosks, where consumers can touch and feel all they want before taking the plunge on a new PC.

I’m Sam Eaton for Marketplace.

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