Dell 2005 Annual Report Download - page 5

Table of Contents
• Customers can purchase custom-built products and custom-tailored services. Dell believes the direct business model is the most effective model for
providing solutions that address customer needs. In addition, Dell's flexible, build-to-order manufacturing process enables Dell to turn over inventory every
five days on average, and reduce inventory levels. This allows Dell to rapidly introduce the latest relevant technology more quickly than companies with
slow-moving, indirect distribution channels, and to rapidly pass on component cost savings directly to customers.
• Dell is a low-cost leader. Dell's highly efficient supply chain management and manufacturing organization, efficient direct business model, and
concentration on standards-based technologies allow Dell to maintain one of the lowest cost structures among its major competitors and to pass those
savings to its customers. Dell's relentless focus on reducing its costs allows it to consistently provide customers with superior value.
• Dell provides a single point of accountability for its customers. Dell recognizes that as technology needs become more complex, it becomes more
challenging for customers to efficiently address their information technology needs. Dell therefore strives to be the single point of accountability for
customers with complex technological challenges. Dell offers an array of services designed to provide customers the ability to maximize system
performance, efficiency, and return on investment.
• Non-proprietary standards-based technologies deliver the best value to customers. Dell believes that non-proprietary standards-based technologies are
critical to providing customers with relevant, high-value products and services. Focusing on standards gives customers the benefit of extensive research and
development from Dell and its entire supply chain, rather than a single company. Unlike proprietary technologies, standards provide customers with
flexibility and choice while allowing their purchasing decisions to be based on performance, cost, and customer service.
Product Development
Dell is focused on developing standards-based technologies that incorporate highly desirable features and capabilities at competitive prices.
Management believes that Dell employs a unique and inherently better collaborative approach to product design and development. With direct
customer input, Dell's engineers work with a global network of technology companies to architect new system designs, influence the direction of
future development, and integrate new technologies into Dell's products. This collaborative approach enables Dell to quickly and efficiently
deliver new products and services to the market. Dell's research, development, and engineering expenses were approximately $460 million for
fiscal 2006, 2005 and 2004.
Products and Services
Dell designs, develops, manufactures, markets, sells, and supports a wide range of products that are customized to individual customer
requirements. Dell's product categories include desktop computer systems, mobility products, software and peripherals, servers and networking
products, and storage products. In addition, Dell offers a wide range of enhanced services. For revenue by product and services categories,
see "Revenues by Product and Services Categories" in "Item 7 — Management's Discussion and Analysis of Financial Condition and Results of
Operation" and Note 9 of Notes to Consolidated Financial Statements included in "Item 8 — Financial Statements and Supplementary Data".
• Desktop PCs. Dell offers Dell XPSTM, OptiPlexTM, and DimensionTM desktop computer systems, and Dell PrecisionTM desktop workstations.
- Desktop Computer Systems. Dell customers can select from three lines of desktop computer systems. The OptiPlexTM line is designed to help business,
government, and institutional customers manage their total cost of ownership by offering stability, security, and managed
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