Dell to expand portfolio

Dell Computer CFO Jim Schneider laid out the company's growth strategy this week, citing peripherals, consumer electronics and enterprise products as core elements of Dell's expansion plans.

Speaking at an IT supply chain conference in the US, Schneider also struck a conciliatory note toward resellers.

"We've always said we don't need to own everything," he said. "We want to own the customer relationship, but for the services we offer we work with lots of partners."

A linchpin of Dell's strategy is to limit HP's revenue stream from printers, even to the point where Dell would lose money on printer sales, Schneider said.

 "The goal for us is not to make income in this area. It's a longer term opportunity for us," he said. "We need to get a much bigger base of products out there to drive consumables."
Dell is on track to generate US$1 billion in printer and imaging revenue this year, Schneider said. Most of those sales are based on printers manufactured by Lexmark.

Tech Data chairman and CEO Steve Raymund, who attended the conference, said Dell is making inroads selling low-end printers to consumers but hasn't made much headway selling printers to the corporate space.

The consumer market represents a major opportunity for Dell in general, Schneider noted. "We can cut through the whole distribution chain, so that's a natural for us," he said.

Schneider added that he expects Dell to become more successful in the enterprise space because of new blade servers and a refresh to the Clariion midrange storage products that Dell resells from EMC.

"We were disappointed in enterprise growth, but following some product transitions we expect that segment to grow faster," he said.

IBM's decision to sell its PC division to China-based computer vendor Lenovo Group also represents an opportunity for Dell because Lenovo has little experience outside China, according to Schneider.

"Companies that have merged have lost share over time, and I don't see this deal being any different," he said.