Dell has warned that swathes of old, surplus technology stagnating in the UK market place is a ‘huge problem’, and has also called the culture of price cutting at the bottom of the market ‘an absolute bloodbath’.
The firm blames weak consumer demand as a major problem, attributing it to a decline in its own sales earlier this year.
"Let’s be really honest with each other here. The consumer market is soft. The consumer market is really soft. And this is a global phenomenon – we had our Q1 results that came out and although our consumer business was three billion dollars, it was in seven per cent decline. And that’s purely down to the fact that the demand just isn’t there," Sarah Shields, executive director and GM for UK and Ireland consumer at Dell told us.
She claims a strategy of avoiding the ‘bargain basement’ area of the market has helped it alleviate the problem of weak consumer demand, but that floods of old technology has damaged the market.
"Times [in the consumer market] are tough. And I think that what we’ve done, we’re we’ve been successful, we’re not in this race for zero. There’s no fun at the bottom of the market. It’s an absolute bloodbath. We are much more interested in giving customers exactly what they want. The right technology for the right price. And not just the bargain basement deal of the day.
"There’s so much old technology floating around at the moment, and I don’t want to buy old stuff with my money even if it is cheap. I think it’s a huge problem. If you look at GfK and IDC figures for last year, there was a massive surplus as we came into 2011. And that’s all old technology. The UK market was in a dreadful state in calendar Q1. January sales and into February – it was pretty horrific. And we saw it in the retailer results. We see it in the results of every big player in this market."
For our full interview with Dell, click here.