Dell Rolls Out Ultra Thin Laptops - Analyst Blog

The third largest PC maker in the world Dell Inc. (DELL) recently announced the shipment of its newest invention, namely the Inspiron M101z laptop. The compact device is already available in the market at a minimum price of $449.0 and bears a one-year limited warranty.

The latest discovery weighs less than 4 pounds and is enhanced with features such as WLED display, full-width keyboard, Bluetooth, Integrated Ethernet and Wi-Fi.

Powered by Advanced Micro Devices Inc.’s (AMD) Athlon II Neo Mobile Processor and integrated ATi graphics, Inspiron M101z laptops are expected to help customers experience better digital performance with clear visual effects, multi-tasking and energy savings.

Dell believes that Inspiron M101z will provide more than 6 hours of battery backup with its 6-cell rechargeable battery. Moreover, the users will have access to Dell’s Design Studio for adding a personal design to their possession.

Dell’s continuous efforts to manufacture new and improved laptops at affordable prices should help it strengthen its position in the consumer market and improve its credibility after the fiasco with Intel Corp. (INTC).

We are encouraged by Dell’s PC shipments which rose 12.4% worldwide and 23.7% in the U.S. during the second quarter of 2010. Market research firm Gartner Inc. anticipates spending in the professional sector to rise by year-end 2010 and in 2011 owing to a larger refresh cycle. We expect Dell to be one of the key beneficiaries to capitalize on the increasing opportunities.

Dell reported strong first-quarter revenues with an encouraging 21% growth over the prior-year quarter, driven by strength across all its business segments. Dell expects fiscal 2011 revenues to increase 14.0% to 19.0% from the prior year, driven by the spike in consumer and corporate spending.

However, Dell’s relative weakness in emerging markets remains and its high debt level is also a concern. Moreover, stiff competition from technology majors, such as Hewlett-Packard Co. (HPQ), Apple Inc. (AAPL), International Business Machines Corp. (IBM) and Microsoft Corp. (MSFT) is always a factor to consider before investing in Dell.

Keeping the above factors in mind, we are comfortable with our short-term Hold rating on Dell shares, which equates to a Zacks # 3 Rank.