Fotolia

Dell admits Intel chip delay could impact Windows refresh

In the earnings call for Dell’s Q3 2019 results, the company admitted that up to one-third of Windows PC refresh orders may not be fulfilled until 2020

Dell has posted a 2% increase in revenue for the third quarter of 2019 of $22.8bn.

The company’s client solutions group revenue reported third-quarter revenue of $11.4bn, up 5% on Q3 2018, while commercial revenue grew by 9% to $8.3bn. However, revenue in Dell’s consumer business declined by 6% to $3.1bn. 

The company acknowledged that PC component price changes will need to be managed. It also said that the Intel processor supply issues experienced by the PC industry could continue well into the first half of 2020.

Significantly, Dell admitted that this delay in the availability of Intel processors has impacted its ability to fulfil orders to customers upgrading to Windows 10, which could see some enterprises struggle to refresh Windows 7 devices before 14 January 2020, when Microsoft ends support

In a transcript of the earnings call posted on the Seeking Alpha financial blogging site, Jeffrey Clarke, vice-chairman, products and operations, warned analysts that Dell expected to see a 20% increase in the price of SSDs in the fourth quarter. He also pointed out that industry analysts have predicted that DRAM inflation will begin in Q2 2020.

“We clearly have captured the operating benefits from the significant cost declines in fiscal 2020 and it will be our job to mitigate these expected increases for our customers and for Dell in fiscal 2021,” said Clarke.

Clarke also discussed the shortage of Intel processors that has affected the PC industry. “Intel CPU shortages have worsened quarter-over-quarter and the shortages are now impacting our commercial PC and premium consumer PC Q4 forecasted shipments,” he said.

Read more about Windows 7 migration

  • Moving on from Windows 7 is still a necessity for more than one-third of organisations, and if done correctly, an OS migration can help modernise and secure your organisation.
  • With Windows 7 inside last extended support year, lots of businesses and organisations need to plan to migrate to Windows 10 sooner rather than later. Here’s why.

Asked how the processor shortage could impact Dell’s PC business, chief financial officer Thomas Sweet suggested that the shortfall of new Intel-powered Windows 10 PCs could lead to a spill-over of new PC upgrades to the first half of 2020 as enterprises rush to replace older Windows 7 PCs with Windows 10 devices before Microsoft ends support for the older operating system.

“History would suggest that if we can’t fulfil demand in the industry, then we will see it spill over into the coming calendar year, particularly with Windows 10,” he said.

Clarke expected this spill-over of new PC orders to meet the end of support date for Windows 7 would continue to lead to a challenge in Intel processor supply. 

Read more on Microsoft Windows software

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close