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DELL Australia Faces $6.5M Fine for False Monitor Pricing
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Dell Technologies’ (DELL - Free Report) Australian unit has been ordered by the Federal Court to pay A$10M ($6.5 million) in penalties for misleading customers on discounted hardware prices.
The Australian Consumer and Competition Commission (ACCC) imposed a A$10 million fine on the tech giant for making false and misleading representations about discounted prices for add-on computer monitors.
The monitors were often advertised with a higher strikethrough price, indicating to customers that they could make significant savings.
Dell Australia admitted that it has misled customers over prices available on monitors in bundle packages alongside desktop, laptop or notebook devices. Markedly, Dell Australia sold more than 5.3K monitors with overstated discounts.
The ACCC fine follows a lengthy court case that began last year. In November, the regulator began proceedings against the Australian subsidiary which resulted in Dell conceding its tactics had misled consumers in June.
Slump in PC Market Hurts Dell’s Prospects
Dell is experiencing a tough 2023 due to a challenging macroeconomic environment and a slump in the PC market.
Dell has underperformed its PC market peers, including Apple (AAPL - Free Report) , HP (HPQ - Free Report) and Lenovo (LNVGY - Free Report) in the second quarter of 2023. The company registered the highest fall of 21.8% to 10.4 million units, followed by Acer 21.1% to 4 million PCs.
PC volumes of Lenovo fell 20.8% to 14.3 million units, while ASUS registered a decrease of 17.3% to 3.9 million units. HP and Apple both registered a modest decline in its PC shipments. While HP’s PC shipments fell 0.9% to 13.5 million units, Apple’s shipments dropped 0.3% to 5.3 million PCs.
Dell suffered from lower PC shipments in the first quarter of fiscal 2024. It witnessed weak PC demand and slowing infrastructure demand, which was partially offset by strong growth in storage. Client Solutions Group revenues were $11.98 billion, down 23% year over year.
Dell now expects second-quarter fiscal 2024 revenues between $20.2 billion and $21.2 billion, down 21.6% year over year at the mid-point, with Infrastructure Solutions Group down in the low single digits sequentially. The company expects roughly 200 basis points negative impact of unfavorable forex on revenues.
The Zacks Consensus Estimate for the fiscal second quarter is pegged at $1.13 per share, down 32.7% over the past 30 days. For fiscal 2024, the consensus mark for earnings is pinned at $5.55 per share, down 27.07% over the same timeframe.
However, the PC-maker’s expanding portfolio including security holds promise for its prospect this year.
Dell’s latest security services and solutions will help enterprises protect against threats, respond to attacks and secure their devices, systems and clouds. It is expanding the capabilities of Managed Detection and Response solutions with the latest Pro Plus, which is a fully managed security operations solution that helps organizations prevent, respond and recover from security threats.
Moreover, Dell is now offering more choices to its customers with CrowdStrike Falcon in its SafeGuard and Response portfolio. It is also launching Product Success Accelerator for Cyber Recovery, a new service that helps enterprises protect critical data and maintain business continuity.
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DELL Australia Faces $6.5M Fine for False Monitor Pricing
Dell Technologies’ (DELL - Free Report) Australian unit has been ordered by the Federal Court to pay A$10M ($6.5 million) in penalties for misleading customers on discounted hardware prices.
The Australian Consumer and Competition Commission (ACCC) imposed a A$10 million fine on the tech giant for making false and misleading representations about discounted prices for add-on computer monitors.
The monitors were often advertised with a higher strikethrough price, indicating to customers that they could make significant savings.
Dell Australia admitted that it has misled customers over prices available on monitors in bundle packages alongside desktop, laptop or notebook devices. Markedly, Dell Australia sold more than 5.3K monitors with overstated discounts.
The ACCC fine follows a lengthy court case that began last year. In November, the regulator began proceedings against the Australian subsidiary which resulted in Dell conceding its tactics had misled consumers in June.
Slump in PC Market Hurts Dell’s Prospects
Dell is experiencing a tough 2023 due to a challenging macroeconomic environment and a slump in the PC market.
Dell has underperformed its PC market peers, including Apple (AAPL - Free Report) , HP (HPQ - Free Report) and Lenovo (LNVGY - Free Report) in the second quarter of 2023. The company registered the highest fall of 21.8% to 10.4 million units, followed by Acer 21.1% to 4 million PCs.
PC volumes of Lenovo fell 20.8% to 14.3 million units, while ASUS registered a decrease of 17.3% to 3.9 million units. HP and Apple both registered a modest decline in its PC shipments. While HP’s PC shipments fell 0.9% to 13.5 million units, Apple’s shipments dropped 0.3% to 5.3 million PCs.
Dell suffered from lower PC shipments in the first quarter of fiscal 2024. It witnessed weak PC demand and slowing infrastructure demand, which was partially offset by strong growth in storage. Client Solutions Group revenues were $11.98 billion, down 23% year over year.
Dell now expects second-quarter fiscal 2024 revenues between $20.2 billion and $21.2 billion, down 21.6% year over year at the mid-point, with Infrastructure Solutions Group down in the low single digits sequentially. The company expects roughly 200 basis points negative impact of unfavorable forex on revenues.
The Zacks Consensus Estimate for the fiscal second quarter is pegged at $1.13 per share, down 32.7% over the past 30 days. For fiscal 2024, the consensus mark for earnings is pinned at $5.55 per share, down 27.07% over the same timeframe.
However, the PC-maker’s expanding portfolio including security holds promise for its prospect this year.
Dell’s latest security services and solutions will help enterprises protect against threats, respond to attacks and secure their devices, systems and clouds. It is expanding the capabilities of Managed Detection and Response solutions with the latest Pro Plus, which is a fully managed security operations solution that helps organizations prevent, respond and recover from security threats.
Moreover, Dell is now offering more choices to its customers with CrowdStrike Falcon in its SafeGuard and Response portfolio. It is also launching Product Success Accelerator for Cyber Recovery, a new service that helps enterprises protect critical data and maintain business continuity.