Dell confident of getting 50% revenue from Net

Posted on July 14, 1999 
Filed Under CNET, Julian

by Julian Matthews

PENANG, Malaysia–Direct sales giant Dell Computer Corp is confident its Internet business will account for 50 percent of revenues by the end of 2000.

“The projection is a very realistic target as we are aggressively expanding our business and operations through the Internet,” said Dell Asia Pacific Customer Centre (APCC) vice president and managing director Simon Wong.

He said sales via its Web site currently accounts of 30 percent of revenues and surpasses US$18 million a day, which translates to US$6.5 billion a year.

Wong said the Internet was increasingly applied to its entire business from component design to end-user support and helped ease customer use and cut costs.

Dell’s revenues for Q1, 1999 was US$5.5 billion, with net income of US$434 million and earnings per share of US$0.16. Revenue from the Internet was more than triple the same quarter the previous year.

Wong said Dell led all major competitors in unit, revenue and profit growth during the first quarter, with analysts reporting it had advanced to No. 2 position in worldwide marketshare.

He said revenue for the Asia Pacific region including Japan was up 48 percent in the first quarter compared to Q1,1998. “Strong growth in the region was driven by exceptional results in China,” said Wong at a meet-the-press session in Penang on Monday.

Dell set up the APCC plant in Penang three and a half years ago and shipped its one millionth PC in December. Its direct sales operations extends to 13 countries in the region.

Dell is expected to launch its online auctions site next week, in an attempt to experiment with new business models on the Internet.

In March, the company opened Gigabuys, an online superstore featuring more than 30,000 computer-related products and services including those from other manufacturers.

Dell’s new auction site will be associated with Gigabuys, and will likely feature refurbished computer equipment but eventually new products as well.

The products put up for auction will be offered by third parties as is done by leading Internet auction house eBay.

GigabuysAuction.com, GigAuction.com, as well as DellAuction.com have been registered by Dell but the company has not named the actual URL of the service.

Published in CNET Asia, July 14, 1999

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