Small computers capable of connecting to the internet, like the handheld Palm and cellular phones that can download web pages, have become a significant force in the marketplace, but they don't stand a chance of replacing desktop and laptop PCs, according to Michael Dell, chairman and CEO of Dell Computer.
Dell, who spoke this week at the 2000 Global Internet Summit, said Palm Computing's Palm computer and other similar devices have "delivered excitement" to the PC marketplace, but he said the amount of revenue and profit generated by the devices are not significant.
"These devices are not necessarily substitutes to the PC, but complementary. You can't find a Palm Pilot user who doesn't have a PC," Dell said at a press call after his speech to about 1500 attendees of the conference.
Dell is the second-largest PC maker in the world, after Compaq, and the largest in the US. Nevertheless, Dell acknowledged that the company's fourth fiscal quarter, which ended on January 28, was "challenging".
He was optimistic about Dell's future, especially in the areas of electronic commerce, technical support and web hosting, and in opportunities presented by the continued refreshment of internet architecture.
Dell again defended desktop PCs and laptops as he disagreed with predictions that cellular phones that allow users to view web pages using the wireless application protocol (WAP), a specification for sending internet-based content to mobile phones, will eclipse traditional PC products. The devices' screens are simply too small, he said.
"People consume information better with their eyes," Dell said.
Dell also said growth in the number of small devices connected to the web was good for his company because it drives demand for servers and storage computers, which lie at the heart of Dell's business. Most of Dell's research and development investment is going toward servers and other internet architecture machines, he said.
Asked for his views on taxation of internet sales, Dell, whose company last year did half its sales on the internet, said lawmakers should consider it a global issue. An increasing amount of consumer computer products that Americans buy are not actually built in the US, and it's fairly easy for manufacturers to ship the goods directly to end users, he said.
"You don't have the question of my state or your state," he said. "It's my country or your country, and that's a much more challenging issue to deal with."
Dell added that transactions concluded over the internet should not be taxed differently from transactions concluded in regular stores, and lawmakers considering how to recover lost sales taxes should consider the improvements in the economy that are happening and the number of jobs being created because of the internet.
Dell also commented on the IT worker shortage, another issue that, like taxation, has drawn the attention of Congress. Lawmakers should raise the cap on the number of immigrant workers with high-tech skills allowed in the country, Dell said.
"There is a huge shortage of workers," Dell said. "Congress should remember that a company like Intel doesn't just decide where to put (new facilities) in the US. It puts them where the people are."