Dell to beef up computer services
SB:Here is a bit more 'specific' news out of the conference.
By Bloomberg News
Special to CNET News.com
April 8, 1999, 10:40 a.m. PT
NEW YORK--Dell Computer, the No. 1 direct seller of personal computers, said it will increase sales and earnings by offering more computer services and selling more machines to consumers.
Founder and Chairman Michael Dell told a meeting of analysts here that the PC market is "healthy" and unit sales in the industry likely will rise about 14 percent a year. His lieutenants said services will be key to sustaining the company's sales growth, which has topped 50 percent a quarter for most of the last two years.
Dell defines services as anything beyond selling a computer. That includes solving computer glitches for clients and adding software to customize PCs.
Emphasizing services is a change for Dell, which turns to outsiders to provide services to its customers. Services "is an area Dell has downplayed," said Kurtis King, an analyst at Nationsbanc Montgomery Securities, who rates Dell "buy." "This is an important, positive message."
Dell fell 7/8 to 45 9/16 in midday trading. The stock has gained 25 percent this year, compared with a 9.3 percent increase in the Standard & Poor's Computer Systems index.
Dell executives said they don't plan to compete against big computer service companies like Andersen Consulting or IBM. Dell executives said the computer maker will continue to use other companies such as Wang Global to provide services to Dell customers.
Dell's goal is to sell more products and services with Dell PCs. Dell recently unveiled Gigabuys.com, a Web site devoted to selling printers, digital cameras and other devices used with computers. Dell, based in the Austin suburb of Round Rock, Texas, also plans to step up its marketing to consumers, which account for a much smaller percentage of Dell sales than corporations.
Dell said it still has no plans to enter the market for bargain-priced PCs, though it cuts prices as costs fall.
Michael Dell said he's optimistic about PC demand because many people will buy new machines when Microsoft's new operating system, Windows 2000, makes it debut later this year. Faster Internet connections also will spur demand for new machines. |
