Bargain basement positioning hurts Dell

Dell posted lower than expected revenues in its most recent quarter, citing lower prices of its computers. 

The vendor reported a 15 per cent year-over-year increase in revenue to $13.4bn. Net income increased 28 per cent to $1.02bn.

Despite the strong sales growth, Dell sold more low-end PCs than it had wanted to, according to chief executive Kevin Rollins.

"We got a bit more aggressive than we needed to," he said in a conference call, blaming a poorly executed marketing campaign that failed to entice consumers to buy more expensive models.

"We mis-executed and did not get the upsell in the consumer business that we expected."

Despite sales in the government and consumer parts of its business falling short of expectations, Dell was upbeat about the past quarter that ended on 29 July.

The vendor sold 47 per cent more laptop computers, and the high volume of desktop shipments resulted in a 0.5 per cent market share gain. Server shipments increased by 25 per cent.

Outside Dell's core computer and server business, the firm reported a 35 per cent growth in software and peripheral sales such as printers, 41 per cent more services revenue and 50 per cent more storage business.