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Foxconn Cleared to Buy Dell's Polish PC Manufacturing Unit

|Includes: Dell Inc. (DELL), FXCNY
Trading Markets today reported that EU cleared Foxconn's purchase of Dell's Polish manufacturing assets.

Could this be a sign of major tidings for Dell, is this the first move in a series of moves for Dell to sell its entire PC business to Foxconn?

There shouldn't be any surprise if the answer is Yes. Dell's PC business generates an operating margin of about 1 percent.  The company is facing stiff competition from Asian players such as Acer and Asus, given this competition, it is unlikely that Dell will be able to recover margin in the PC business soon.

Also, Dell in its most recent bid for 3PAR showed its intent that it is considering developing an end-to-end portfolio of IT solutions.  Carrying, the commoditized, low-margin PC business has the real possibility to deter Dell from achieving its enterprise goals.

 


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