Dell Computer says it's now well on the way to becoming a $60 billion company.
The Round Rock, Texas, PC maker, known for its aggressive pricing on computer hardware, has quickly gained market share and boosted revenue and profitability over the past several years. In the fiscal year that ended Jan. 31, Dell collected $35.4 billion in revenue and turned a $2.1 billion profit. It finished the fourth quarter of calendar 2002 with nearly 16 percent of the worldwide PC market, second to Hewlett-Packard by only about 140,000 units, according to IDC.
But Dell executives, who last April set the company's goal of doubling revenue from the $31.2 billion of the preceding fiscal year, believe that 2002's performance is only the beginning for the company. "The ability to become a $60 billion company is within our grasp," Kevin Rollins, Dell's president, said at the company's annual meeting with financial analysts in New York on Thursday.
To reach that milestone, Dell is banking on continued market share gains. Executives say that for every percentage point of the market the company accrues, it also takes in an additional $2 billion or so in revenue. To hit the $60 billion target Dell would have to increase its share of the PC market--its mainstay--to nearly 30 percent. It could also add revenue by other means, such as services contracts or sales of peripherals. The revenue goal is attainable, analysts said. But Dell will face challenges from competitors including IBM and HP, which ultimately seek the same basic goals.
"I think it is doable," IDC analyst Roger Kay said. "Things could go wrong, but Dell continues to execute against its model, and (the model) seems to work. It's hard to say what's wrong with that. I've been looking for a weakness, but so far I can't find any."
News source: C|net
