Dell to aggressively market PCs with new chip

Alan Crosby

PRAGUE: Dell Computer Corp fired another round in the current personal

computer price war on Wednesday, saying it will aggressively market machines

with the new Intel Pentium IV microprocessor. "We are going to be extremely

aggressive with Pentium, basically bringing customers incredible value with the

Pentium IV, pricing it very much like we would a Pentium III and encouraging the

transition," Dell Chairman Michael Dell told reporters during a visit to

Prague.

With PC sales slumping in the face of an economic slowdown, manufacturers,

led by Dell, the world's largest personal computer maker, have slashed prices to

attract customers. But Dell said he is optimistic his firm's sales will continue

to outpace the market, boosted as well by the roll out of Microsoft's Windows XP

operating system in late October.

"I think the market should see an increase in growth as we get the new

operating systems, new processors rolling out. We expect Dell will continue to

grow much faster than the market," he said. Dell recently overtook Compaq

as the world's leading PC producer and saw first quarter unit growth of some 27

per cent compared to single digit growth for the market as a whole.

"I haven't heard many suggesting that Compaq is at risk of regaining its

number one position. I doubt that will be the case and certainly all the data

that we have for the second quarter so far suggests that once again Dell is

significantly outgrowing the market," he added.

Last week, he said he was aiming to increase the firm's global market share

to 40 per cent from its current 13 per cent. With large cash reserves of over $5

billion and a supply and manufacturing line that is known for its efficiency,

Dell said he expected the company to survive any price war better than many

competitors.

"We are going to deliver the customer absolutely the best value in the

industry and I think that means that we are going to continue to grow faster

than the market," he said. "And we have the cost structure that

enables us to do this. Our cost structure is 50 percent lower than our

competitors."

(Additional reporting by Jan Lopatka)

(C) Reuters Limited 2001.