Dell is pinning its hopes on new touchscreen products pegged to Windows 8's launch to boost the fortunes of its consumer products division.
Sales of the US firm's notebook computers and other mobile devices were down by 10% over the three months to 4 May, compared with the same period the previous year.
It blamed competition from cheap entry-level products in emerging markets, a category it does not participate in.
Its shares fell 13% in extended trade.
Net income for the first quarter was $635m (£404m), a fall of 33%.
Revenue dropped 4% to $14.4bn, with its consumer unit reporting a steeper 12% decline.
The company predicted only a small increase in sales over the current period.
Although it expected to benefit from falling hard disk prices as suppliers recovered from last year's Thai floods, it warned that the savings would be offset by higher memory and display costs.
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