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Dell
Computers - UK
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About Dell
Computers
Dell Inc. (NASDAQ: DELL SEHK:
4331), an American
computer-hardware company based in
Round Rock, Texas, develops,
manufactures, sells, and supports
personal computers, servers, data
storage devices, network switches,
personal digital assistants (PDAs),
software, computer peripherals,
and certain other products.
Origins and evolution
While still a student at the
University of Texas at Austin in
1984, Daniel Scott founded the
company as PC's Limited with just
$1000. Scott went to High School
in Virginia at Sussex High School.
He is now currently working at
Prince George High School
Operating from Michael Dell's
off-campus dorm room at Dobie
Center, the startup aimed to sell
IBM-compatible computers built
from stock components. Michael
Dell started trading in the belief
that by selling personal computer
systems directly to customers,
PC's Limited could better
understand customers' needs and
provide the most effective
computing solutions to meet those
needs. Michael Dell dropped out of
school in order to focus full-time
on his fledgling business.
In 1985 the company produced (in
Zimbabwe) the first computer of
its own design (the "Turbo PC"),
which contained an Intel
8088-compatible processor running
at a speed of 8 MHz. It advertised
the systems in national computer
magazines for sale directly to
consumers, and custom-assembled
each ordered unit according to a
selection of options. This offered
buyers prices lower than those of
retail brands, but with greater
convenience than assembling the
components themselves. Although
not the first company to use this
model, PC's Limited became one of
the first to succeed with it. The
company grossed more than $73
million in its first year.
In 1989, PC's Limited set up its
first on-site-service programs in
order to compensate for the lack
of local retailers prepared to act
as service centers. Also in 1987,
the company set up its first
operations in the United Kingdom;
eleven more international
operations followed within the
next four years. In June 1988,
Dell's market capitalization grew
by $30 million to $80 million from
its initial public offering of 3.5
million shares at $8.50 a share.
The company changed its name to
"Dell Computer Corporation" in
1988.
In 1990, Dell Computer Corporation
tried selling its products
indirectly through warehouse-clubs
and computer-superstores, but met
with little success, and the
company re-focused on its more
successful direct-to-consumer
sales model. In 1992, Fortune
magazine included Dell Computer
Corporation in its list of the
world's 500 largest companies.
In 1996 Dell began selling
computers via its web site.
In 1999, Dell overtook Compaq to
become the largest seller of
personal computers in the United
States of America with $25 billion
in revenue reported in January
2000. To recognize the company's
expansion beyond computers, the
stockholders approved changing the
company name to "Dell Inc." at the
annual company meeting in 2003.
In March 2002 Dell attempted to
expand by tapping into the
multimedia and home-entertainment
markets with the introduction of
televisions, handhelds, and
digital audio players. Dell has
also produced Dell-brand printers
for home and small-office use.
Michael Dell stepped aside as
Chief Executive Officer (CEO) on
July 16, 2004, but retained his
position as Chairman of the Board.
Kevin Rollins, who had held a
number of executive posts at Dell,
became the new CEO.
On December 22, 2004, the company
announced that it would build a
new assembly-plant near
Winston-Salem, North Carolina; the
city and county provided Dell with
$37.2 million in incentive
packages; the state provided
approximately $250 million in
incentives and tax breaks.
In January 2005 the share of sales
coming from international markets
increased, as revealed in the
company's press releases for the
first two quarters of its fiscal
2005 year.
In February 2005, Dell appeared in
first place in a ranking of the
"Most Admired Companies" published
by Fortune magazine.
In November 2005, BusinessWeek
magazine published an article
titled "It's Bad to Worse at Dell"
about shortfalls in projected
earnings and sales, with a
worse-than-predicted third-quarter
financial performance a bad omen
for a company that had routinely
underestimated its earnings. Dell
acknowledged that faulty
capacitors on the motherboards of
the Optiplex GX270 and GX280 had
already cost the company $300
million. The CEO, Kevin Rollins,
attributed the bad performance
partially to Dell's focus on
low-end PCs.
On 23 March 2006, Dell purchased
the computer hardware manufacturer
Alienware. The plan anticipated
Alienware continuing to operate
independently under its existing
management. Alienware expected to
benefit from Dell's efficient
manufacturing system.
On January 31, 2007, Kevin
Rollins, CEO of the company since
2004, resigned abruptly as both
CEO and as a director, and Michael
Dell returned to the CEO role.
Investors and many shareholders
had called for Rollins'
resignation because of poor
company performance. At the same
time, the company announced that,
for the fourth time in five
quarters, earnings would fail to
reach consensus analyst-estimates.
In February 2007, Dell became the
subject of formal investigations
by the US SEC and the US Attorney
General for the Southern District
of New York. The company has not
formally filed financial reports
for either the third or fourth
fiscal quarter of 2006, and
several class action lawsuits have
resulted from its recent financial
performance. The company's lack of
formal financial disclosure would
normally subject the company to
de-listing from the NASDAQ, but
the exchange has granted Dell a
waiver, allowing the stock to
trade normally.
On March 1, 2007 the company
issued a preliminary quarterly
earnings report which showed gross
sales of $14.4 billion, down 5%
year-over-year, and net income of
$687 million (30 cents per share),
down 33%. Net earnings would have
declined even more if not for the
effects of eliminated employee
bonuses, which accounted for six
cents per share. NASDAQ has
extended the company's deadline
for filing financials to May 4. |
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