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Blackstone Drops Dell Bid, Cites Declining PC Market
An anonymous reader writes "The Blackstone Group has notified Dell's board that it has ended its bid for the company after performing 'due diligence' on Dell's books. The private equity firm gave two reasons for its withdrawal in a letter to the special committee of the board reviewing privatization offers: the 'unprecedented 14 percent market decline in PC volume in the first quarter of 2013' and 'the rapidly eroding financial profile of Dell.' IBM's recently announced intention of withdrawing from the x86 server market may have also spooked investors. Blackstone was one of two outside bidders that emerged after founder Michael Dell and Silver Lake Partners announced a deal to take the company private for $24.4 billion. The remaining bidders did not comment on Blackstone's withdrawal; however, the Bloomberg piece notes that Dell's original deal with Silver Lake Partners contains language preventing the latter from backing out."
I'm a doctor, not an investor.
"No matter where you go, there you are." -- Buckaroo Banzai
Just saying....
Select from tblFriends where interesting >= 4;
Easy, bring back the Dell Dude
Dell just makes computers out of the same Chinese parts that everyone else uses to make computers. They once had an appealing brand, which gave them an advantage over all the other people who were selling an indistinguishable product. But this is not the case anymore. The "we don't care about our exploding capacitors" fiasco has forever tied Dell to an image of a company that cuts corners on quality. Sure, they kept some deals with the corporate and education sector, but my employer is going through hardware upgrades and now we can choose a new Dell or a new iMac. I won't miss you, Dell!
The Blackstone Group has notified Dell's board that it has ended its bid for the company after performing 'due diligence' on Dell's books.
They didn't like what they saw. Dell ran that company very lean and I bet that Blackstone couldn't figure out how to get the returns they want from any investment in that company. And since PC sales growth has stagnated, they couldn't count on expanding revenues and cash flows to support an obscene amount of leverage (ie debt) that these types of firms like to burden takeovers with.
Dell just makes computers out of the same Chinese parts that everyone else uses to make computers.
Then which Chinese computer maker should we patronize instead? Is Lenovo still making good laptops?
The Dell tumble continues...all from dropping their standards in the first place.
let's create a kickstarter and buy it.
I mean, shit, we need a manufactuer that actually doesn't hate the FOSS community.
The value might actually get low enough that it's possible... :P
Ebay !! It's not just for those without garages !!
Is what this is.
Well Icahn's still in the game, he's claims to offer $15 a share vs Dell's $13.65 per share, I don't like Icahn. He tried to scam Yahoo shareholders (inc me) by claiming a deal was worth more than it actually was.
In the deal, he stripped Yahoo of all it's cash, handing it to shareholders, counted that money (the money we already owned) as money given by the Microsoft deal. He then added a loan from Microsoft which required Yahoo to pay it back with interest back to Microsoft. He counted that loan as income from the deal too. If a company CEO had done it, the SEC would be on him for fraud, but Icahn is a third party asset stripper and he's not obligated to be truthful about the value of a deal.
"Icahn's offer, which was also submitted the day before the deadline expired, includes purchasing $2bn of the firm's shares at $15 per share, and offering $2bn of cash equity financing."
So basically, Icahn is trying to buy only a portion of the shares (company is worth 22 billion), enough to scupper a full buyout. And there's the loan with interest.
He tends to list those as income to pretend an inflated figure on a buyout value. Loans are loans, you pay them back with interest, they're not income, they're not part of a buy price. If the company doesn't need the cash, they're a charge on the company. If the loan on Dell is to pay Icahns buyout, that's a leveraged buyout and its not worth squat to existing shareholders.
Dell shareholders, we Yahoo shareholders had bitter experience of that turd Icahn, you read his numbers very very closely, he tends to flat out lie in the summary about the true value of a deal. He didn't get rich by giving you his money. Classic games to watch out for: buying blocking positions to prevent a buyout, leverage buyout, buying a company by borrowing money against the assets of the company. Third party deals, e.g. agreeing with a competitor some gain if he poisons a company during buyout.
If you don't understand what I mean, look at the Yahoo deal. That would have stripped Yahoo of cash, made it dependant on Microsoft for short term money and made their income also dependant on Microsoft. MS for its part promised to buy a portion of shares in the future at a higher price. The likely block of shares that referred to was Icahns block, I believe that was to be his reward for poisoning Yahoo.
BEWARE!
Dell's prices are much higher than Xmas last year when I bought my last laptop, so this would appear to be news to Dell. And that is with a high Aussie dollar.
a year ago I bought my mom, who's NEVER used a computer in her life, an iPad 2 to be able to facetime with the kids (she has MS & traveling is getting progressively harder/less frequent) & see pictures on facebook, etc. I figured anything else she used it for would be gravy but she took to it like a duck to water & now my dad has pretty much abandoned his PC in favor of it!
I keep posting this on different threads on different sites but bottom line is the two dominant macro trends right now are that backend computing is consolidating into "the cloud" (despise term but basic premise is valid) and client/UI is going mobile (tablets & phones). unfortunately for dell & m$, they're irrelevant in both spaces (well, other than m$ patent-trolling android). they'll be around for years to come but we've clearly passed the inflection point like mainframes did in the 90s (actually, there is some irony in that one could argue that amazon, etc are the new issc/etc & that browsers/apps are the new 3270s/fat clients).
I tink dat this has 2 doo with dem mobile devices. Dem mobile devices are found in your ARM, which is inside your smartphone, inside your tablet, and inside your car (!!!!!!!!!). I hope dat you get one soon, and now the apple has their ipad and the android devices everywhere. But Windows 8 is good! And soon dey will have it running office on a tablet with 3 hour battery life@! Kewl.
Lenovo CEO is a deputy to the national congress of communist party.
and with IBM out of the picture and Lenova making darn near the same cheap junk Dells the only one left that's big enough you can trust them not to fold and bail on warranty. Yeah, I know they're hurting, but they're a long way from dead. For those of you citing Hostess they really just folded so they could get out of paying the workers pensions. Dell's got everything in Mexico except a tiny bit of support staff that's non-Union, so that liability's a non-issue for them.
I guess what I'm saying is if you're mid sized you're options are Dell, HP or Lenova. Sure, they're interchangeable, but you're going to have to pick on. At least until Chromebooks become viable.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
The aside about IBM exiting the x86 server business has me wondering. Perhaps the "International Business Machines" corporation needs to change its name to the "International Software as Services" corporation. Or how about the "American Software as Services" corporation? I prefer the acronym generated by that name.
" and having complete control over my OS and Hardware"
Locked down BIOS means your PC won't meet those goals. But setting aside that niche one, the video editing and photoshop functionality IS heading over to Android. I sort of expect Android to branch into desktop forms, just as its branched into TV sticks and tablets and phones and games boxes and thermostats and NAS boxes.
PC still has a niche, but it may end up that niche is just users who won't switch.
That can be a rich niche, look at IBM and Mainframes, IBM can sell a mainframe for millions that isn't as powerful as the PC running the terminal software! Simply because companies stick with what they know. Companies are not going to switch from PCs in the immediate future, but that doesn't mean Android won't take more of that market.
So, obviously, smartphones, tablets, any device which is mobile is going to be more attractve than a desktop PC, for the casual user, since for the most part, it's cheaper and more convenient to get a mobile computing device than it is to get a Desktop PC.
:)
:)
Netbooks and Laptops or even Desktop Replacements will get more popular as they get lower in price and offer way much better battery life.
The Desktop PC won't go away soon, it has its use in business or for the hardcore "PC" gamers. But it will never again be the dominant form of computer usage, those days are gone.
But there is another reason why Desktop PC sales are down.
In the recent years, hardware specs even at the lower end of the spectrum are more than powerful enough to handle the demands of new software, and thus people have less reasons to upgrade. "Remember: if it ain't broke, don't fix it!"
Then you see Microsoft trying to get Windows 8 out there, but it's not working, because Windows 8, isn't flying with people. At this point in time, people who use a PC, don't want to use a PC like a mobile device.
Microsoft would have been better to stick to Windows 7 and keep improving it, adding an optional mobile interface layer and get people to purchase touch screen monitors instead.
They could have built a momentum towards a mobile OS experience, without alienating users.
Oh well
Give it time, sooner or later that's gonna be true for most companies that we consider "American" today.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
3 years? That's a random and irrelevant restriction to apply.
I chose three years to be the median time between paid upgrades to the Windows OS. Among Windows 95, Windows 98, Windows XP, Windows Vista, and Windows 7, all except Windows XP were replaced about three years in.
Tablets are less hassle for the same functionality a laptop will provide.
Johnny is in a programming class in high school, and he brings homework home, and it happens to be in a language other than Lua or Python. Can he complete his assignment on an iPad?
In addition, many video streaming sites have been known to block users of tablets. Hulu's free tier is PC-only. Amazon video plays on PCs but not on any tablet other than a Kindle or an iPad. Vimeo requires (or required?) the uploader to have a Plus subscription or the videos won't be playable on tablet operating systems. Viewing any other video produces a message to the effect "Click here to remind yourself to watch this video on a computer." I've found that a lot of videos on YouTube are blocked on mobile as well, with a similar message.
There is however much to gain, notably a touch screen
A touch screen gets fingerprints all over the screen, and a capacitive touch screen alone is far coarser than a mouse or even a trackpad. A touch screen with a fine-pointed stylus like some recent Samsung tablets might work, but let me know when the next iPad supports that.
It's not that they won't have a PC. It's that they won't have, or want to have, a *new* PC.
And when their PC breaks, they'll buy a used PC from a pawn shop. Is that what you're trying to say?
Something that simply cannot be done on an iPad
There are plenty of things that can't be done on an iPad, such as video games that satirize an identifiable organization, video games published by a company now out of business, homework for programming class in a language other than Lua or Python, and uploading things other than photos or videos to a web site. But you're right that most of these can be done on a used PC, so long as a family chooses to buy a PC to replace its dead PC.
Dim-bulbs will dribble on about Intel's and Microsoft's current profits. The irony is that the doom of the traditional PC marketplace is fully visible within the same. The Intel Tax (no decent CPU unless you spend 200 dollars) and the Microsoft Tax (no per-seat licence for the OS+Office unless you spend a fortune each year) means the entire world is ready for lower cost alternatives, none of which can possibly be provided by a future Intel or Microsoft.
Dell attempted to take the changing market head on by readying the ultimate in thin clients that would do the real work on the cloud. This thin client is a ultra-cheap ARM based product that replaces the traditional PC. Of course, Dell was looking for suckers who would then pay a fortune each year in 'cloud' fees to access traditional PC software remotely. The Microsoft Tax one stage removed still costs the same or more.
Those of us with a memory know the last great change for Dell came when it stopped developing its own proprietary PC hardware, and switched to using pre-made components from the Far-East. The birth of the 'generic' PC. Of course, as Dell grew, it once again reached the point where it could spec its own design of MB and PSU when useful.
The problem with the PC market today is massive over-pricing of key components, especially the Motherboard, CPU, and to a lesser extent the RAM and HDD. Compare the inners of your desktop PC with, say, the Raspberry Pi. Yes, there is a massive performance difference, but mostly because the Pi is based on a poor, obsolete ARM SoC. Switch that part for a quad-core A15, and a tiny card like that is a perfect replacement for the desktop PC used by 99% of people.
ARM tablets using similar tiny computers now have 2GB of pretty fast RAM, a GPU (graphics) powerful enough for everything but mid-end gaming, and 4-cores of CPU power that rival the early 2-core AMD processors that still make XP run acceptably fast today. Remember, the ARM parts can do the Windows 7/Windows 8 like screen acceleration in their sleep.
So where do companies like Dell go? Dell tried the non-PC product market big-time, but always failed to make an impression. Dell produced the world's most popular PDAs, but never built a lasting success. Why? Because like all big PC companies, Dell is predicated on GREED. The idea that the PC market will forever soak its customers with horribly high prices, and thus massive profits. Dell loved its PDAs while they could charge obscene prices for them.
Today, even the cheapest current Android tablets can be plugged into a monitor and mouse, and potentially make for an excellent desktop computer for the majority of users. Today, all that prevents this is a lack of default desktop functionality in Android and Android apps, but this is on the verge of changing. Desktop shells and windows environments are being crafted for Android at an exploding rate. We are only a year away from Android being seen as a desktop replacement for Windows.
What can companies like Dell do in the face of this? Dell needs its relationships with Microsoft and Intel, and the three of them need continuing obscene levels of margins.All they can do is hug each other ever tighter as they fall off the cliff together.
PS the x86 market will continue for years to come, but in a very different way. AMD is producing the model for the future, small efficient Jaguar cores that integrate excellent graphics on the same die, and can provide desktop like PCs using tiny laptop like motherboards. The complete boxed desktop PC, minus HDDs and display, but with integrated RAM, needs to be 150 dollars or less, and only AMD can bring this price-point with enough performance. High-end gaming PCs have got pretty much as fast as they ever will be from a CPU and RAM bandwidth POV, and will represent a declining market in the face of the new consoles from Sony and Microsoft. It is uncertain how long the manufacturing market can continue to support the traditional gaming PC, when the components for such PCs are used by fewer and fewer ordinary computer users.
Unless you really check facebook from your lap on the sofa
My aunt does exactly that on her iPad 2.
data manipulation (burning discs)
Why must one burn a disc instead of connecting the tablet to a stereo system or television?
power PC's will still have a role
Yet Apple switched away from them to Intel in 2006 :-P Power Architecture has been pretty much restricted to workstations and PlayStations nowadays.
One other platform that I think is somewhat ignored is the HTPC and or SmartTV functionality.
Apple makes a wireless extender for iPad video called Apple TV.
With the ability to have a huge HD TV these days you can scale up Win7, give the user a wireless keyboard and mouse, and then they still have access to a computer even they don't view it as such.
And put the wireless keyboard and mouse where? I've discussed HTPC with others on Slashdot, and they can't seem to understand how the ergonomics of using a PC for both PC tasks and home theater tasks would work.
there IMO is room in the market for that type of "PC" to remain in households that might otherwise not use one.
There's more than one person who would disagree with you.
About archiving photos, videos, and the like to a hard drive, you make a good point. I'd like to see what certain staunch iOS advocates on Slashdot would say about that.
About the PowerPC joke, perhaps it was my fault for not coming up with a clearer symbol for tongue-in-cheek than ":-P".
About Apple TV, I'm not an Apple advocate; I'm just stating what's available. The Apple TV does a lot of what people expect out of a set-top box for over-the-top music and video services. I bring up the facts because solid counterarguments to Apple advocates' arguments interest me more than ad hominems.
About ergonomics, I was told that tray tables are unstable and for trailer trash. It appears the majority find "their own personal comfort" in a TV-style remote control.
There's more than one person who would disagree with you.
So?
I'm just trying to figure out how to defuse the most common arguments of HTPC haters. If you think posts using the devil's advocate technique are necessarily "fail" or "stupid", I'm sorry.
Could be, but hopefully there will be new innovative American companies to replace them.
i am loving it
iOS users use the free 5GB of iCloud storage for backup, and when that is filled, they pay Apple for more storage.
This page advertises that adding 50 GB of more storage would cost $300 over the three-year expected service life of an iOS device. That's enough to buy three 1 TB hard drives, even after the recent Thai flood.
assuming they have wifi
And assuming their home Wi-Fi is backed by fiber, cable, or DSL, not satellite or microwave.
Even if its not icloud, storing your work on a home NAS with fault tolerant storage is a lot more sensible than trusting it to a single drive in your portable device.
I happen not to currently own an iPad, but I do know the iPad has no direct counterpart to the "Finder" on a Mac or the file manager that one can download for an Android device. Do most applications support storing documents, photos, videos, and the like on a home NAS, or are they hardcoded to use the application publisher's or Apple's servers?
I am not interested in scoring points. I am interested in truth.
You are correct that a desktop would have more power than any sort of mobile solution. Now please prove that the average end user has any use for such power.
Are you claiming that these other Slashdot users are mistaken when they claim that the majority are uninterested in connecting a computer to a television? Even if this is the case, my research shows lack of interest as well. I've mentioned some advantages of a home theater PC to other members of my extended family, and I don't recall anyone else showing any interest in these advantages.