Dell: Expanding market positioning across US
Second largest personal computer provider in United States:
The second biggest personal computer manufacturer and distributor in United States controlling market share of 25.4% in 2010, Dell offers enterprise and consumer IT hardware and software solutions along with strong market penetration in personal computer market space. United States is the core market for Dell accounting for 52% (2008: 53.5%) of group revenues in 2011. Large enterprise and public sector are the biggest customers constituting 56.4% of total revenue mix (2010-2011). Dell is publicly traded on NASDAQ stock exchange with market capitalization of US$27.11 billion (September 2011). The company was incorporated in 1984.
Second biggest personal computer market space worldwide:
United States personal computer segment value sales reached US$47.3 billion, with year-on-year growth of 3% in 2009-2010, with personal computer volume sales expected to reach 103 million, with CAGR of 7.5% (2009-2014). The market is stipulated to witness decline of 1.5% annually in the next 3-5 years (2014). United States is the second leading personal computer market space accounting for 30.4% of worldwide value sales in 2010. HP is the leading personal computer manufacturer in United States with market share of 27.5% (2009-2010). Domestic market is slightly consolidated with four manufacturers controlling market share of 76%.
Improve long-term margins via acquisition of enterprise software and service entities:
In 2011, Dell aggressively acquired assets (Kace Networks, Ocarina Networks, Scalent Systems, Boomi and InSite One) in higher margin enterprise business segment such as servers, software, storage and services. The company plans to reduce dependency on consumer business segment on long-term basis accounting for 20.1% (2010: 22.8%) of group revenues in 2011. On the other hand, services business segment (including software) improved 5% annually with Perot System purchase contributing US$588 million. Globally, Dell has enhanced inorganic expansion to improve long-term profitability of enterprise and public sector business segments.
Can Dell surpass HP as the biggest personal computer manufacturer in United States?
In 2011, Dell generated net revenue of US$61.4 billion, with year-on-year growth of 16%. The company plans to consolidate public sector and large enterprise IT solution business activities into single entity to improve operational and net margins on long-term basis. In 2011, large enterprise business segment accounted for 29% of group revenue mix. In September 2010, the company horizontally diversified its server and storage product portfolio via launch of New PowerEdge Servers and PowerVault Storage brands in United States and Europe. Will focus on higher margin segments such as server, storage and IT services enhance its brand penetration and presence in United States on long-term basis?