Dell 2007 Annual Report Download - page 26

Table of Contents
shortening our product development cycle time and examining our supply chain models. Lastly, we are examining our pricing
and margin strategies to improve our profitability.
• Reigniting growth — We are enabling our growth strategy by focusing on five key areas:
– Global Consumer — In Fiscal 2009, our consumer segment will expand beyond the U.S. to include worldwide sales to
individual consumers and select retailers as a part of an internal consolidation of our consumer business. The consolidation
will improve our global sales execution and coverage through better customer alignment, targeted sales force investments in
rapidly growing countries, and improved marketing tools. We are also designing new, innovative products with faster
development cycles and competitive features. Lastly, we have rapidly expanded our retail business in order to reach more
consumers.
– Enterprise — We are focused on simplifying IT for our customers to allow customers to deploy IT faster, run IT at a total
lower cost, and grow IT smarter. As a result of our "simplify IT" focus, we have become the industry leader in server
virtualization, power, and cooling performance.
– Notebooks — Our goal is to reclaim notebook leadership by creating the best products while shortening our development
cycle and being the most innovative developer of notebooks. To help meet this goal, we have recently separated our
consumer and commercial design functions and launched several notebook products. We expect to launch more notebook
products in Fiscal 2009.
– Small and Medium Business — We are focused on providing small and medium businesses the simplest and most complete
IT solution by extending our channel direct program (PartnerDirect) and expanding our offerings to mid-sized businesses.
We are committed to improving our storage products and services as evidenced by our new Building IT-as-a-Service
solution, which provides businesses with remote and lifecycle management, e-mail backup, and software license
management.
– Emerging countries — As a part of our growth strategy, we are focusing on and investing resources in emerging
countries — with an emphasis on Brazil, Russia, India, and China. We are also creating custom products and services to
meet the preferences and demands of individual countries and various regions.
We continue to grow our business organically and through strategic acquisitions. During Fiscal 2008, we acquired five companies, among
which the two largest were EqualLogic, Inc. ("EqualLogic") and ASAP Software Express, Inc. ("ASAP"), and we purchased CIT Group
Inc.'s ("CIT") 30% interest in Dell Financial Services, L.P. ("DFS"). We expect to continue to periodically make strategic acquisitions in
the future.
Fiscal 2008 Performance
Share position • We shipped 40 million units for calendar year 2007 according to IDC, resulting in a worldwide PC share
position of 14.9%. After leading the worldwide PC market for the past six years, we fell to the second
position for calendar year 2007. We lost share, both in the U.S. and internationally, as our growth did
not meet the overall PC growth. Our U.S. Consumer segment continued to underperform, which
slowed our overall growth in unit shipments, revenue, and profitability. This was mainly due to intense
competitive pressure, particularly in the lower priced desktops and notebooks where competitors
offered aggressively priced products with better product recognition and more relevant feature sets. A
slight decline in our worldwide desktop shipments also was a factor in our losing worldwide PC share
position; worldwide desktop shipments grew 5% during calendar year 2007.
Net revenue • Fiscal 2008 net revenue increased 6% year-over-year to $61.1 billion, with unit shipments up 5% year-
over-year, as compared to Fiscal 2007 net revenue which increased 3% year-over-year to $57.4 billion
on unit growth of 2% over Fiscal 2006 net revenue of $55.8 billion.
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