Another run at being the global leader in pc sales. Exhibit 12 shows the sales and market shares of the world top five FC vendors in the first quarter of 2008 as compared to the fourth quarter of 2007. Moreover, dell’s senior executives believed that their aggresives moves to reduce costs would help restore profit margins, given that there seemed to be some modest relief having to contend with eroding average revenues per unit sold.
However, by late fall 2008 dell’s prospects for overtaking HP were looking more bleak. Global recessionary forces had caused a significant slow down in global IT spending during 2008 and even larger cutbacks were being forecast for at least the first half of 2009 in light of the global financial crisis that emerged in fall 2008. Still, hp reported a 5% increase in revenues for it’s 2008 fourth quarter ending october 31, versus the year earlier 2007 fourth quarter and 2008 fourth quarter earnings increase of 4 percent, moreover HP was forecasting that fiscal 2009 revenues would be in the $127 to $130 billion range, up from $118 billion in 2008. Dell’s sales revenues in third quarter of 2008 were 3% below those in the 2007 third quarter on unit shipment growth of 3%, dell’s third quarter 2008 net profits were down 5%.
The walll street journal reported in september 2008 that dell was trying to sell its worldwide network of computer factories in an effort to reduce production costs the apparent plan was to enter into agreements with contract manufacturers to produce its PCs. While dell had for many years been the industry leader in lean manufacturing approaches and cost efficient build to order production methods and was still the low cost leader in producing desktop pc. It had fallen behind contract manufactures in producing notebook pcs cost effiently and there was a pronounced shift among individual consumers to purchase laptop pcs