The PC and server giant told CW360.com it anticipates there will be little demand for 64-bit PC computing and said it will not be bringing out 64-bit Itanium 2 servers in the foreseeable future.
The Itanium 2 processor has been touted as the first true 64-bit processor from Intel that has been optimised for servers.
IBM and HP/Compaq are expected to introduce new Itanium 2 servers next week but a spokeswoman for Dell said the company would not launch the next generation of the IA-64 server until stronger customer demand materialises.
She said Dell would continue to sell its current generation IA-64 server, the PowerEdge 7150.
Dell believes that the primary use of Itanium-based servers today is in software development and that 64-bit operating systems and applications for the Itanium processor family are still in a development stage.
Commenting on Dell's decision, Ovum analyst Gary Barnett said that in the current economic climate PC manufacturers would struggle to find demand for 64-bit technology.
"It's fair to say there will not be many applications that will be optimised for 64-bit Windows and Linux," he said.
Barnett said Dell's strategy was clearly not to compete with Compaq in the data centre. Instead he said it competed on price and performance.