Will This PC Giant Survive?

The PC industry has gone through a radical paradigm shift in the last couple of years. It all started with the revolutionary product, the iPhone, launched by the late Apple CEO. This device has not only totally transformed the smartphone/mobile industry but has also redefined the meaning of the word 'computer.'
Companies such as Dell (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ),which once dominated the technology sector, have been marginalized. Hewlett-Packard, which was once the world's largest PC and printer manufacturer, is struggling to regain its lost growth. while Dell has plans to go private.
Dell has been one of the companies most affected by the sudden rise in fortunes of smartphone manufacturers. The shift of computing to handhelds and smartphones reduces the amount of money consumers are willing to pay for a laptop or a desktop.

Besides the obvious effect on product margins, the upgrade-cycle has also become much longer for PC consumers. The turnaround in PC sales, or the industry for that matter, is no longer a question of PC hardware alone. The ecosystem has recently become a fundamental component of any consumer technology item. The three leading ecosystems in technology are iOS, Android, and Windows from Microsoft (NASDAQ: MSFT).
Microsoft’s Windows is the largest ecosystem in the world and has been responsible for shaping the world we live in today. Unfortunately, Microsoft failed to penetrate the smartphone market with its Windows Phone series, and has taken drastic measures to keep itself relevant in the industry.
Microsoft has launched the first touch-based operating system, i.e. Windows 8. A smartphone version, the Windows Phone 8, has also been launched to target the growing demand for handheld devices.
The intention of any ecosystem is to provide a uniform user experience across different consumer devices. Microsoft is the best-placed company to accomplish this task because it already has the largest user following of its Windows ecosystem. The technology giant still has the challenge of gaining traction for its smartphone and tablet OS.
Dell has a choice to keep its commitment to the Windows operating system, place all of its eggs in the Windows 8 basket, or hedge its bets. The company recently tried to penetrate the smartphone market with the Dell Streak series. The poor response to this Android-based device forced the company to discontinue the model. Dell has released a number of interesting Windows 8 based Utlrabooks and tablets, but only time will tell how long the PC industry will survive and tablets will completely take over computing.
Bottom line
The troubles on the field always create off-the-field problems. The two largest PC manufacturers in the world are currently in the middle of a severe management crisis.
Hewlett-Packard’s board has narrowly escaped investor attempts to bring about a major board shuffle. Hewlett-Packard's board has been responsible for some of the most misplaced acquisitions of the last decade and has miserably failed to safeguard shareholder interest. Despite recommendations from leading advisory firms like ISS and Glass Lewis, the board of directors has managed to hold onto their seats for the time being.
On the other hand, Dell is in the middle of a no-holds-barred struggle to take the firm private, with the founder and CEO right in the middle of the proceedings.
According to recent news, Michael Dell is now trying partner with Blackstone after his failed attempts to take the company private via his Silver Lake partnership. Billionaire investor Carl Icahn is the biggest hurdle to Mr. Dell’s ambitions. The Blackstone deal will only go through if Michael Dell is promised the CEO position. I believe that it seems increasingly difficult for the PC industry to recover and Dell is a highly-risky investment in its current state. If the struggle to take it private continues, one or all interested parties might pullout, which can deliver a serious blow to the stock price. LINK