Dell's New Tablet Computer Will Enter Tough Market for PC Sales

Dell's Streak, the computer-maker's new tablet computer, may stumble out of the gate when it launches Thursday, if, as some analysts predict, back-to-school sales come under pressure by worried consumers.

Dell's (DELL) stock is down more than 8% since Monday's close, as analysts such as Christopher Danely of J.P. Morgan warned Tuesday that semiconductor sales indicate PC orders are "falling off a cliff." That prediction didn't bode well for Dell, which later in the day announced its new and shiny tablet computer would debut with a price point of $299.99, with a two-year AT&T service contract.

In sizing up the PC landscape for the coming quarter, Danely said in his research note:
Our checks in the Taiwan PC food chain indicate order rates from the PC end market deteriorated sharply during the last part of July. We wrote about this in our 2Q10 earnings wrap up on August 4, "Quick Check Post Earnings Suggests Incremental Weakness Coming Down the Pike"; however, we believe order rates declined even more toward the end of the month.
Dell is marketing its new tablet computer to students, as well as mobile professionals and families. But Barclay's analysts caution the PC outlook in the third quarter will likely be subdued, as consumers and corporate America tighten up their technology spending, according to a Reuters report.

The current headwinds Dell is facing on the eve of its Streak launch puts a damper on its entry into the tablet market, an arena where it's been slow to enter. Dell's tablet will face a growing list of competitors, which include (AMZN) with its pioneering Kindle e-book reader and Apple (AAPL), which debuted its trend-setting (and hot selling) iPad earlier this year, kicking off a feeding frenzy amongst computer makers.

Samsung Electronics (SSNHY), like Dell's Streak, plans to offer an Android-based tablet called Galaxy Tab sometime this quarter, and Lenovo (LNVGY) is gearing up to offer its LePad tablet computer.
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