Computer hardware demand strengthening, Dell reports

Focus on customers is paying off globally

October 29, 2002|By BLOOMBERG NEWS

TOKYO -- Dell Computer Corp. Chief Executive Officer Michael Dell said yesterday that worldwide demand for computer hardware has improved and the Far East will be a good market for the world's biggest personal computer maker.

"Globally, we've seen some rebound in overall demand," Dell said at a news conference in Tokyo, where he introduced the company's smallest desktop computer. "There's great opportunity for Dell, especially in Japan and Asia Pacific."

Dell surpassed Hewlett-Packard Co. in the third quarter to again become the world's biggest personal-computer maker, market researcher IDC said earlier this month. Aided by a model of selling directly to customers and new products, the company managed to beat rivals and push sales amid stalling demand, investors said.

"Dell is a special case," said Shigemi Nonaka, chairman of Polestar Investment Management Co., which manages 4.5 billion yen ($36 million) in Japanese equities. "A recovery in computer demand won't come until the middle of next year."

Shares of Austin, Texas-based Dell rose 10 cents to $28.94 yesterday, and Hewlett-Packard shares climbed 65 cents to $15.27.

Lehman Brothers analyst Dan Niles upgraded Hewlett-Packard to "overweight" from "equal weight," saying the company is showing improved revenue and better margins.

Dell reiterated that a rebound in PCs will be driven by improvement in corporate customers' profit.

"We continue to face a challenging market in an economic sense around the world, but Dell is succeeding by maintaining a relentless focus on customers," Dell said.

Dell had 16 percent of the market in the third quarter, up from 13.5 percent a year earlier, IDC said. The researcher last month trimmed its estimate for this year's growth in PC shipments to 1.1 percent, or 135.5 million units, from 4.7 percent predicted in June, citing weaker-than-expected Christmas sales and slow recovery of corporate spending.

Dell visited Japan to introduce the company's smallest desktop, the OptiPlex SX260, which measures 9.7 inches high, 3.3 inches wide and 9.5 inches deep. Dell promotes the desktop as well-designed for customers who work in small places because it can be mounted under a desk, on a wall or behind a flat-panel monitor.

On Oct. 1, Dell said third-quarter sales will rise more than forecast to a record $9.1 billion.

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