Dell Predicts Market Rebound and Aggressively Pursues Sales

Kevin B. Rollins, Dell's president and chief operating officer, claims that the PC industry will rebound as early as fourth quarter 2001, and the release of Windows XP (formerly code-named Whistler) will be a contributing factor. In an address at the Bear Stearns Technology Conference in New York, Rollins said that he expects industry growth rates to jump back up to previous levels driven by the release of XP and faster versions of the Intel Pentium 4 processor.

Like many PC makers, Dell has had to look to nontraditional markets for continued growth. This approach has led the company to expand in Southeast Asia, South America, and Europe, where the company has focused primarily on enterprise markets. In the United States, Dell has pledged to undercut any rival's PC prices. The company can do so because Dell's large market share lets the company purchase components at the lowest possible prices. Analysts have awarded Dell for its effort—Morgan Stanley raised Dell stock's rating to Outperform.

Dell's aggressive marketing has paid off: The company shipped more than 31 million PCs in first quarter 2001, and the company now ships approximately 25 percent of all PCs sold in the United States. Only Gateway has risen to Dell's challenge with a program designed to beat the price of any advertised system from a major PC maker.