Dell's plan to save itself


Dell (DELL) has been losing market share in the PC industry to Hewlett-Packard (HPQ) and Asia-based Lenovo and Acer. It has not been able to come up with novel machines to attract a new wave of buyers. Its earnings today are expected to be poor.

HP at least partially solved it reliance on hardware by expanding into the IT services business. Since it bought EDS, its services division has grown tremendously and has strong margins. Dell has not made anywhere near the effort that HP has to diversify away from PC and server sales.