Dell beats rivals during crunch time

During the boom years of 1997-2000, Dell outperformed its competitors in

sales and profit growth. Now, as the industry is struggling, Dell chairman

Michael Dell said his company is feeling only a minor impact from the slowness

in overall computer sales.

"I think our performance actually been quite respectable. Dell was the

only company to show positive unit shipment growth over the last three

quarters," Dell said, in comparing his firm to Hewlett-Packard, Compaq

Computer, Gateway and others.

Dell's PC shipments have risen 19 per cent from a year ago and the firm's

market share has risen 14 per cent worldwide and 25 per cent of the PC market in

the US. Eventually, though, Dell said, the economy and PC demand will snap back.

Once that happens, Dell believes his company has the right strategy. "We

think Dell is incredibly well positioned for an upturn. Our strategy is very

much on track." Dell's many businesses will start replacing PCs purchased

in 1997 through 1999.

Also, the increased adoption of digital music, photographs and video, as the

forthcoming Windows XP software and Intel 2GHz processors will boost demand, he

said.

While Dell continues to make gain in its market share and increases its

success in selling highly profitable server computers and storage systems to big

businesses, some of its largest rivals are struggling.

Dell also termed the HP-Compaq merger as 'sensible'. "These companies

have struggled to change their cost structures. Part of the rationale for their

proposed merger is to cut costs, so from that point of view, it makes

sense."

At the same time, Dell said he expects his company to benefit from the deal

because potential customer confusion and the internal turmoil the merger could

send buyers looking at Dell. "The opportunity that it presents us is pretty

compelling. The consolidation is likely to benefit us more than any other

company in our industry," he said.