AUSTIN, TEXAS: Dell is to apply its vaunted direct business model to the global consumer electronics market in a bid to place itself at the heart of the so-called digital lifestyle as the convergence of computers and home electronics begins to accelerate.
At a press briefing at Dell's headquarters yesterday, CEO Michael Dell (pictured) said that the company would drive standardisation in the consumer electronics much in the way it did with PCs, servers, PDAs and computer storage.
"As standards are developed these products tend to become commoditised and more affordable … Dell is often the catalyst for making this happen," he said. In a shot across the bows of the Sonys and Canons he added boldly: "Many of the traditional consumer electronics businesses are coming to realise that the forces that have led to the success of the PC are unstoppable."
He went on to outline his vision of the digital future where the PC is at the centre of the home entertainment experience and all devices are attached to a wired or wireless IP-based network. "You'll have broadband data streams coming in and out of the home and you have all these different media types, whether it's music, photos, videos or the traditional computer type information. The PC becomes the centre of that universe."
Dell would not be drawn on which product areas the company would target first but made it clear that few areas would be out of bounds so long as there was profit to be made and cost to be driven out. He emphasised, however, that the company would be choosing its new markets carefully and would not be introducing a deluge of products in new areas. Dell would still be mainly focused on developing and extending its existing product ranges. "There's still a lot to do in terms of finding new ways to deliver more value to existing customers without necessarily introducing new products," said Dell.
He added that driving down cost did not necessarily lead to commodity solutions. "We install server clusters with 3,000 servers. Is that a commodity? Some of the most powerful supercomputers in the world are Dell. Are they commodities? [Computers] are not like rice or porkbellies."
Dell celebrates its 20th birthday next year but the company is showing plenty of youthful vigour. In a market that is showing only low single digit growth Dell increased its operating profits by 37pc in the first quarter, year on year. Michael Dell, who founded the enterprise when as a 19-year-old University of Texas student he saw a market for custom-built PCs, is showing no inclination to hand over the reins of power. "I'm 38 years old. If I was a basketball player it would be time for retirement but I'm not tall enough and not very good at basketball," he joked. "I've got a few good years left."
By Brian Skelly