Dell Computer Corp Chief Exec-utive Michael Dell said European sales are growing for the biggest US personal-computer maker at the expense of rivals including Compaq Computer Corp.
Dell, No. 2 in Europe behind Compaq, is gaining market share by reducing prices, said its founder, who is on a one-month working tour of Europe. The company expects to overtake Compaq as European market leader, Dell said without estimating when. Dell dethroned Compaq as the world's top-selling PC maker, in terms of unit sales, in the first quarter.
"We'll continue to grow faster than the market," Dell said. "We don't have a target to be less than No. 1 in any market of the world." In Europe, "Compaq is No. 1 in revenue, not in growth."
Compaq Chief Financial Officer Jeff Clarke said last week that sales in Europe are slowing, especially in the UK and Germany. Dell overtook Compaq as the top-selling personal computer maker in the first quarter.
Dell is experiencing its strongest sales growth in computer servers, for which first-quarter sales climbed as fast as 90 percent in markets such as Germany, the CEO said. The company is the No. 4 computer supplier in Europe's largest economy, he said.
Peter Blackmore, Compaq executive vice president of worldwide sales, said Compaq has cut its server prices to compete with Dell.
"Germany has certainly, for the last couple of quarters, been a pretty strong performer for us, and actually the whole central European region," Dell said. The company has "consistently strong business in the UK and Ireland," he added. Dell's gain of market share from rivals "is pretty much universal."
Dell doesn't plan to change its latest forecasts. It said May 17 that profit in the quarter ending in July will be US$0.15 to US$0.17 a share, and sales will drop as much as 5 percent from the prior quarter.
"We set out a new plan for the second quarter," Dell said.
"We have not changed our guidance since then." The company will continue to reduce costs in various ways, such as moving its customers on line.
"You'll see our cost structure continue to come down," Dell said. "I don't think there's going to be a reversal." The expectation that Dell's US sales growth will rebound in early 2002 is "a fairly reasonable assumption." he said.
Michael Dell is visiting the company's operations in 13 countries. He said he's meeting clients, journalists and employees.
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