Dell CEO Sees PC Replacement Cycle Coming
By REUTERS
Filed at 1:32 a.m. ET
May 9, 2001
HONG KONG (Reuters) - Dell Computer Corp Chairman Michael Dell was reluctant on Wednesday to predict the timing of a rebound in personal computer sales, but promised that Dell's sales would grow faster than the overall market.
Dell told reporters at a news briefing that he sees a PC replacement cycle gathering steam toward the end of this year, possibly ending a slide that started last year as the dotcom bubble burst and Y2K buying ended.
``If you fast forward three years from the second quarter of 1999, you get to the second quarter of 2002, which is about the replacement cycle for all those machines installed for the anticipation of the year 2000,'' Dell said.
He said how and when the replacement demand would kick in was difficult to predict, but added, ``I would be surprised if we don't have reasonable (industry) growth for the fourth quarter (of 2001) and the first quarter (of 2002).''
Dell declined to forecast second quarter profit growth. The company on Monday said its first quarter met previous guidance of US$8 billion in revenue and per-share earnings of US$0.17.
``On May 17, when we announce the full standard first quarter results, we'll provide some commentary on the second quarter. Suffice it to say, I believe that Dell will continue to grow significantly faster than the market, and do so with healthy profitability.''
Later on Wednesday, Dell plans to travel to the coastal Chinese City of Xiamen to open a second PC assembly plant there. He said gaining market share in China was one of Dell's top priorities and again said he expected the company's China sales to grow faster than the local market.
He said he did not believe current tensions between the United States and China would threaten the company's mainland.
``I'm not particularly worried about that at the moment.''
Dell said the company's plans to cut 3,000 to 4,000 jobs over the next two quarters would largely be concentrated in the United States, specifically, in central Texas. It would not affect operations in Asia.
He said that had the company not had gains in market share and revenue growth in recent quarters, ``we would have to take a more dramatic action to resize the business.'' |
