Dell reiterates $80bn target
Published: 18 Jul 2005 09:45 BST
Dell chief executive Kevin Rollins has reiterated he thinks the computer maker has the potential to be an $80bn (£46bn) company in the next three to four years but not through its US-based bread-and-butter PC business, echoing comments he made in February.
Though the company enjoys great success in the United States, with $49.2bn in revenues reported for its fiscal 2005, Dell ranks second behind HP in overseas sales. Dell said it currently averages $135.2m in revenues per day, a number that would need to nearly double to reach Rollins' lofty goals.
During the company's annual shareholder meeting on Friday, Rollins said: "Our revenue last year accounted for only about 4 percent of global spending on information-technology products and services, so we have tremendous room to grow."
Rollins said he expects more than 80 percent of Dell's future growth to come from products other than desktop PCs, which the company started selling 10 years ago. The CEO also said he expects about 55 percent of Dell's growth in the next four years to come from outside the Americas.
The top executive at the number one computer maker told shareholders that Dell has great prospects in its newfound printer and television business.
For example, Rollins said, Dell shipped 10 million printers in just more than the two years since the company introduced the first of its own line of printers. Dell says it is number two in the US in both the inkjet and laser categories, behind HP.
Likewise, Dell is holding its own in the flat-panel-display category as it continues to expand into digital and high-definition television.
The company is expected to launch about a dozen new models of flat panels this fall as part of a holiday sales blitz. Executives have said they expect the 30-inch to 40-inch models to be the so-called sweet spot of their sales focus. Dell is also launching a premium brand series of desktop and laptop computers aimed at customers who are willing to shell out for high-ticket items.
Other high growth areas Dell has identified include its storage systems and services. The company's server and storage business accounted for about $35bn in the last year, with more than 70,000 installations piggybacking on deals involving database-software from Oracle. Rollins said Dell is encouraged by the more than 750 high-performance computing clusters the company has contracted out to financial services and telecommunications companies.
Likewise, Dell is expected to build on its 81 million active service contracts with corporations of all sizes. Dell's services, however, are dwarfed by rival offerings from IBM Global Services, EDS, Accenture and HP.
To bolster its aggressive four-year plan, Dell is continuing to build new manufacturing plants in strategic areas. A new plant in Winston-Salem, North Carolina, the company's largest, will begin operations in September. Dell said it is also increasing its manufacturing capacity in Xiamen, China.
Earlier this year, Dell added a second building to its customer contact centre in Oklahoma City and opened new centres in El Salvador and Chandigarh, India.
Dell currently has manufacturing and support facilities in 44 countries.
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