Share value also drops 4% in second quarter as rivals such as Lenovo continue to make gains in the smartphone market.
Dell's shares slid by more than 4% on Tuesday night after the company announced second-quarter profits down 18% and revenues down 7.5%, and warned of a challenging second half to the year, for which it has slashed its earnings outlook.
A slump in PC sales hurt profits, and only the servers and network division saw revenues rise. Now Dell is pinning its hopes in the PC market on its favoured position as a tablet supplier in the first wave of Windows 8 products to be released this October.
Once the world's top PC maker and a pioneer in the tight running of its supply chain, Dell now is struggling to defend its market share against Asian rivals including Acer and Lenovo, and the fast-growing adoption of tablets like Apple's iPad.
Founded by Michael Dell, its chief executive, it is trying to execute a turnaround, juggling acquisitions in the enterprise sector with the aim of bolstering growth with the need to fatten margins by trimming expenses even as global tech spending appears to be slipping. In May, it warned that global tech spending is weakening faster than anticipated.
The US's second-biggest PC maker, Dell on Tuesday forecast revenue would slide 2% to 5% in the fiscal third quarter from the second, to $13.8bn (£83.5bn) to $14.2bn. That lagged Wall Street's target of $14.85bn.
Source: The Guardian