17% DROP IN PROFIT SPELLS A POSSIBLE SHUTDOWN IN 18MONTHS

Dell, in a management filing this week, powerfully recommended that it intended to minimize its network of factories as part of the computer company’s force to condense costs. At the conclusion of previous month, Dell dissatisfied investors by reporting a surprising 17 percent plunge in quarterly revenue, even though its sales augmented 11 percent. Dell held responsible the profit drop chiefly on being too antagonistic in price cutting to increase market share in a few regions of the world.

But Dell, based in Round Rock, Tex., has also sustained more of its personal factories for closing hardware assembly and software installations than rivals like Hewlett-Packard, who bestow on contract manufacturers. Dell’s industrialized modus operandi was for customers to position orders on the Web or by phone for a made-to-order appliance. It worked finest for desktop computers sold to business customers, who required business PCs fine-tuned to their requirements. But with the augmentation in the PC market progressively more coming from the consumer market and laptop PCs, Dell’s wide-reaching array of factories look like a cost burden. The Wall Street Journal accounted on Friday, quoting unidentified sources, that Dell had advanced contract workstation producers with a plan “to sell the majority — and probably all — its factories” within the next 18 months.