Monday, February 07, 2005

Dell's Manifest Destiny

Dell's Manifest Destiny "In an industry characterized by shaky finances, Dell's numbers are impressive. Two years ago, the company set a goal of doubling revenue, from $30 billion to $60 billion, in five years. When its revenue for fiscal 2005 is reported later this month, the company is expected to have hit nearly $50 billion, about a year ahead of schedule.
Despite attempts to diversify its product line, PCs still represent the majority of Dell's revenue, about 79% if you include laptops, compared with 21% for servers and other enterprise products. Last year, Dell was the largest provider of PCs worldwide, with 18% market share, according to research firm IDC, slightly ahead of Hewlett-Packard, at 16%. Also, Dell recorded 23% unit growth worldwide over 2003. Domestically, Dell had 33% of the PC market last year, while HP, its closest competitor, had 20%.
With IBM selling off its PC business to Chinese manufacturer Lenovo Group Ltd., CEO Rollins believes Dell is primed to dominate the market. "In some of the business units in the United States, we're already closer to 40% to 50% market share, so that tells us it's possible worldwide," Rollins says. Dell sees future growth outside PCs, too. "We want to see our servers, storage, printers, and services business share as high as our PC market share," Rollins says. "You add all those things up, and the notion of a $60 billion to $80 billion company is pretty simple to get to."
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