"We are moving to the next level of DIRECT,the Internet model..quickly"M.Dell
Frank:
In case you missed this one from yesterday.
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Dell Computer Chairman Says PC Market 'Quite Healthy' (Update2)
New York, June 14 (Bloomberg) -- Dell Computer Corp. Chairman Michael Dell said the market for personal computers is ''quite healthy'' and predicted sales growth at the No. 1 direct- seller of PCs will outpace all competitors'.
In particular, Dell Computer hopes to increase consumer sales by offering services such as Internet access and financing, Dell told investors and analysts on a conference call sponsored by Bear Stearns & Co.
Dell, 34, also addressed concerns about the company's sales growth, which has disappointed Wall Street during the last two quarters. Dell's growth slowed to 38 percent in its fiscal fourth quarter and 41 percent in the first quarter. It topped 50 percent a quarter for most of 1997 and 1998. ''We're feeling very good about the business,'' Dell said. ''We believe the competitive environment is quite healthy.''
Dell said sales at his company will increase faster than the PC
industry's, although he declined to offer specific predictions.
Discounting
While the company sees consumer sales as its biggest growth opportunity in the U.S., Dell said the company won't engage in discounting to win market share. ''We do not plan to dilute the profits of the company through our expansion into the consumer market,'' Dell said.
Analysts have speculated that Dell will be forced to compete with rivals such as Compaq Computer Corp. and sell PCs for well below $1,000 if it wants to gain share in the consumer market. The company tomorrow will unveil a Dimension desktop PC that sells for $899, including a 15-inch monitor.
At the same time, Dell is expanding its use of the Internet to sell PCs to both businesses and consumers.
Dell now generates $18 million a day in Internet sales. It has agreements with 46 suppliers, accounting for 96 percent of Dell's component cost base, to order parts via the Internet. ''We're moving to the next level of direct, the Internet model, and we're doing it very quickly,'' Dell said.
Dell said major customers such as Ford Motor Co. have said Internet ordering has reduced PC costs by $2 million a year. It also has cut Dell Computer's costs by reducing calls to its technical support lines, Dell said. |
