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Tuesday, October 12, 1999

Dell Computer to stay focused on selling PCs
Chief executive says company will stick to its strengths despite Wall Street pressure to diversify
Associated Press

   LAKE BUENA VISTA, Fla. - Dell Computer Corp., the No. 1 seller of personal computers directly to customers, says it will stick to its strengths despite Wall Street pressure to vigorously branch into areas such as computer services.
   While Dell's financial results are among the strongest in the computer industry, its stock price has fallen 16 percent since early this year in part due to investor concerns that tumbling PC prices will slow galloping revenues and profits. Dell's stock price rose 1.4 percent, or 6 cents to $45.56, in trading on the Nasdaq Stock Market Monday.
   On Monday, Dell chief executive Michael Dell said that computer services, or helping corporate customers set up and maintain their computer networks, will remain an adjunct and not a substitute for Dell's main business of selling hardware.
   "I think we can grow in our core business and services will enhance that growth," he said in a talk before thousands of technology managers at the annual Gartner Group computer industry gathering here.
   Dell's go-it-slow strategy contrasts with moves by IBM, Hewlett-Packard Co. and other major Dell rivals to attack the fast-growing services business.
   Those companies are making very little money or losing money in the PC business. IBM last week told employees it's cutting as much as 10 percent of its PC work force after the business lost $150 million last quarter. Compaq Computer Corp. also is struggling to turn around its business.
   But Dell expects further strong financial results from selling PCs due to the company's efficient, oft-copied strategy of selling directly to users and eliminating wholesalers and retailers.

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