Dell 1998 Annual Report Download - page 4

customer-dedicated systems engineers.
The Internet
The Company is committed to refining and extending the advantages of its direct
model approach by moving even greater volumes of product sales, service and
support to the Internet. The Internet, perhaps the purest and most efficient
form of the direct model, provides greater convenience and efficiency to
customers and, in turn, to the Company. As of March 31, 1999, the Company was
receiving in excess of two million visits per week to www.dell.com, where it
maintains 44 country-specific sites. Company sales generated through the
Internet achieved $14 million per day by the end of the fourth quarter of fiscal
year 1999 and approximated 25% of revenue for that quarter.
Through the Web site, customers and potential customers can access a wide range
of information about the Company's product offerings, can configure and purchase
systems on-line and can access volumes of support and technical information. The
Company also develops custom Internet sites, called Premier Pages(SM), for
various corporate and institutional customers, allowing these customers to
simplify and accelerate procurement and support processes. Through these custom
sites, the Company offers the customer paperless purchase orders, approved
product configura-
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tions, global pricing, real-time order tracking, purchasing history and account
team information. The Company currently provides more than 15,000 Premier Pages.
The Company also provides an on-line "virtual account executive" for its small
business customers. And, for all customers, the Company provides a spare-parts
ordering system, and a "virtual help desk" featuring natural-language search
capabilities and direct access to more than 50,000 pages of technical-support
data.
Subsequent to fiscal year 1999, the Company expanded its Internet presence with
the launch of www.gigabuys.com, an on-line source for more than 30,000
competitively-priced computer-related products, including software and
peripherals.
The Company believes that it has significant opportunities for continued growth
in all parts of the world, in all customer groups and in all product categories,
ranging from enterprise systems, such as network servers, high-end workstations
and storage, to home PCs. While the Company believes that its business strategy
provides it with competitive advantages, there are many factors that may affect
the Company's business and the success of its operations. For a discussion of
these factors, see "Item 1 -- Business -- Factors Affecting the Company's
Business and Prospects."
GEOGRAPHIC AREAS OF OPERATIONS
The Company conducts operations worldwide and is managed on a geographic basis,
with those geographic segments being the Americas, Europe and Asia-Pacific and
Japan regions. The Americas segment, which is based in Round Rock, Texas, covers
the U.S., Canada and Latin America. The European segment, which is based in
Bracknell, England, covers the European countries and also some countries in the
Middle East and Africa. The Asia-Pacific/Japan segment covers the Pacific Rim,
including Japan, Australia and New Zealand, and is based in Hong Kong (for areas
other than Japan) and Kawasaki, Japan (for Japan). The Company's operations are
primarily concentrated in the North America, Europe and Asia-Pacific and Japan
regions.
The Company's corporate headquarters are located in Round Rock, Texas, and its
manufacturing facilities are located in Austin, Texas; Limerick, Ireland;
Penang, Malaysia; and Xiamen, China. See "Item 2 -- Properties."
For financial information about the results of the Company's operating segments
for each of the last three fiscal years, see Note 11 of Notes to Consolidated
Financial Statements included in "Item 8 -- Financial Statements and
Supplementary Data."
During fiscal year 1999, the Company continued to strengthen its presence in the
Asia-Pacific area, where it now has direct-to-the-customer operations in 13
countries. In addition, in fiscal year 1999, the Company began operations in
China. The Company intends to continue to expand its international activities by
increasing its market presence in existing markets and by entering new markets.
International activities are subject to certain risks. See "Item
1 -- Business -- Factors Affecting the Company's Business and Prospects."
PRODUCTS AND SERVICES
The Company offers a wide range of products and services, including desktop
computer systems, notebook computers, workstations and network server and
storage products, as well as software, peripherals and service and support
programs.
Desktop Computer Systems