Michael Dell, chairman and CEO of Dell Computer, has outlined plans to increase his company's activities in new markets with an eye to making total sales in those areas equal to those in its core personal computer sales market.
In entering those markets, the company is trying to replicate the success it has had in the personal computer space and will pursue the same strategy of aggressively entering only high-volume markets, he said.
"Despite the success we have enjoyed in quite a difficult market, we are quite optimistic about the opportunities that are available for Dell in the $US800 billion IT market," said Dell at a news conference in Tokyo yesterday. "If you look at the various sectors, you can see that Dell has plenty of room to grow across PCs, servers, storage, services, software and peripherals, and data networking. In fact, we are growing fastest in those areas that have the highest growth."
Dell was in Japan partly to promote the company's expansion into networking products. It already sells network switches under the Power Connect brand in the US and will shortly launch them in Japan as part of its expansion into new business areas. The company is also expected to take its first steps in the PDA (personal digital assistant) space later this year.
"There have been about 1 billion PCs that have been sold since the late 1970s and I believe the next billion PCs will ship much more quickly than the first billion. So there is enormous opportunity for Dell in this market and we plan very much to be part of this growth," he said.
"When we look to the future and the various opportunities we have, we believe we can double the size of our revenues by pursuing attractive markets and by serving customers interests, by growing in new areas like enterprise, services, software and peripherals, and driving these areas to be 50 per cent of our business."
Dell's comments come a month after the company announced higher revenues and profits for the first six months of its current fiscal year. The company saw revenues climb 5.7 per cent to $16.5 billion in the six months to August 2 and reported a net profit of $958 million which was 165.4 per cent higher than that reported for the same period a year earlier.
The company recently raised its third quarter revenue forecast to $9.1 billion from $8.9 billion. Should Dell meet the new target, it would represent a 22 per cent rise over revenues in the third quarter of last year.
Looking ahead, Dell also said on Monday that he expects more from the Asia-Pacific region.
"We continue to face a challenging market in an economic sense, around the world but Dell is succeeding by maintaining a maniacal focus on customers and there is still great opportunity for Dell, especially here in Japan and across Asia-Pacific," he said.
Dell's business in the Asia-Pacific region grew 2.4 per cent in the first six months of the year placing it ahead of Europe, where Dell saw revenues fall 1.6 per cent, but well behind the US market, which grew 8.3 per cent.