Fortune DELL-ing
Sig:
Pretty clever caption eh? No,it's not mine but from Austin American Statesman and here is the article directly from Austin.
Quote of the day: Here is 'lil'some' for those who hesitates.<g>
While there are concerns among some analysts and small investors that Dell's stock is overvalued, its rise continues to reward those who invest sooner rather than later, said John Hurley of Bowman Capital Management in San Mateo, Calif
"At the start of the year, the stock looks very expensive," he said. "By the end of the year, they've so outperformed the market that in retrospect, it doesn't look that expensive."
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Dell foresees a world of growth
At meeting, officials share plans to expand in markets such as China
Dell Vice Chairman Mort Topfer: Says Dell's low market share means lots of opportunity for growth.
By Jerry Mahoney
American-Statesman Staff
Posted: Sept. 26, 1998
For all its record-setting, investor-enriching performance in recent years, Dell Computer Corp. remains a minor force in most of the world's computer markets.
As Dell executives see it, that's good news.
"We're below 10 percent (market share) in eight of the top 10 markets," Vice Chairman Mort Topfer told more than 100 financial and industry analysts Friday. "It suggests our growth opportunity is significant and manageable."
Topfer, one of six executives who outlined the company's operations and prospects during its annual fall meeting for analysts at the Four Seasons hotel, offered a novel slant on Dell's vision for becoming the No. 1 personal computer maker.
While the United States spent about 3.5 percent of 1997 gross domestic product on information technologies, the next nine largest countries averaged only 1.85 percent, Topfer said.
"If Japan, only, ramps IT spending to the U.S. level, it would add $87 billion in global IT spending annually," he said.
He offered no indication that he expects that to happen soon in the world's second-largest economy, which is mired in its worst recession in decades. But Dell clearly expects to get a significant share of PC purchases in Japan and the rest of Asia. During the second quarter, Dell's revenue in the Asia-Pacific region increased 34 percent, even though overall PC shipments declined 9 percent.
China, where Dell recently opened a sales and manufacturing center, offers staggering opportunity, Topfer said.
At an expected 29 percent growth in PC sales over the next five years, shipments are predicted to soar from 3 million units last year to more than 10 million by the end of 2002, he said.
Analysts think China will replace Japan as the second-largest PC market after the United States within three years.
Chairman and Chief Executive Michael Dell predicted that the industry will grow 17 percent in the next three years and that Dell will grow faster than that, which has been its pattern for the past several years.
Dell, who spoke before Topfer, said sales will be fueled by faster chips and more capable software applications. In addition, a shift toward mobile computing will help sales of portables, while gains in bandwidth, which determines the speed at which data can be accessed on the Internet, also will prompt users to replace older systems.
Analysts said that while Dell's performance and rosy forecasts have become virtually routine, they welcome the message.
Mike Kwatinetz of Credit Suisse First Boston likened Dell's analysts meetings to Microsoft Corp.'s in that officials don't offer much news but they provide more detail about strategies.
"They don't have to change the way they do business because they are doing the right things," he said.
While there are concerns among some analysts and small investors that Dell's stock is overvalued, its rise continues to reward those who invest sooner rather than later, said John Hurley of Bowman Capital Management in San Mateo, Calif.
"At the start of the year, the stock looks very expensive," he said. "By the end of the year, they've so outperformed the market that in retrospect, it doesn't look that expensive."
Encouraged by Dell's confidence that it will continue to perform well in troubled economies of Asia and Latin America, investors bid Dell's share up $2.75 in Nasdaq trading Friday to $66.06 1/4. That is more than three times the 52-week low of $18 on Nov. 12.
austin360.com
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