Chuz, i'll have to look at my numbers more closely. however, i don't come up with Dell needing a 20% market share if it maintains a 40% growth rate. simply, the enterprise market with about $24 billion in expected sales over the next year, with Dell having only 2% or less of that market will grow substantially over the next four years, outpacing both the desktop and laptop sales growth. using an annual growth rate of 35% for the enterprise market (actually conservative given the internet's proliferation), the market becomes about $95 billion in four years. if Dell captures 12% of the enterprise market, net revenue would equal bout $9 billion. current laptop market of $9 billion with, again, an expected growth rate of 25% a year yields revenue of $25 billion in four years; if Dell maintains 12% America's and raises international, revenue from this source would equal over $3 billion. boxmaker revenue of $201 billion with 15% growth over next four years yields total revenue of $384; Dell increases market share to 11% yields $42 billion. So, total revenue for Dell with capturing 12% market share for these three categories given assumptions is approximately $54 billion, which translated back to current revenue of $13.2 is about a 35% increase annually using no more than a 12% market share - and not including any peripheral sales such as printers, storage, or other items which Dell is only now entering (6% of Dell's revenue this previous quarter but by some estimates could equal as high as 25% in four years). Dell may also enter additional service revenue agreements by then to serve the enterprise market. nor do these assumptions include substantive or unexpected, explosive growth coming out of China, Africa, or Latin America (which some analysts are expecting). All added together, in four years Dell could actually be doing $65 to $75 billion in revenue, and support a stock price close to $300 (relative to current valuations).
the enterprise market is growing more rapidly than most at IDC originally thought, so a 35% growth rate is conservative as the growth rates continue to be revised upward.
Laptop growth rates are also increasing beyond original expectations. in four years it may be required that ALL college students worldwide have a laptop with which to perform work (downloading assignments, taking tests etc.) currently only about 1/5 of college students have a laptop.
all the while people are starting the whole process over again - replacing the old with the new.
i'm at home now, so doing this by memory. can't check the current revenue figures per category, but will on Monday |
