Dell plans to build on its relatively new businesses in IT services and printing in order to increase its yearly revenue to $80 billion over the next few years, Dell executives and customers said Wednesday.
Dell plans to formally unveil its $80 billion strategy Thursday at its analyst meeting in Texas. The company hopes to generate that amount of yearly revenue within the next three to four years, Dell Chief Executive Officer Kevin Rollins said in a press release Wednesday.
In 2002, Dell set a $60 billion yearly revenue target, and the company announced earlier this year that it expects to reach that figure during the current fiscal year, which will end in January 2006. The company has rarely missed an earnings target since the 2002 announcement, and the first quarter of this fiscal year will be no different, Dell said in the release. The company expects to meet the guidance it issued in February for first-quarter revenue of $13.4 billion and earnings per share of $0.37 when it reports its earnings on May 12.
In order to reach the next target, lesser-known Dell businesses such as printing and services will have to continue to grow, executives said Wednesday during briefings for press and analysts ahead of Thursday's meeting.
Dell is especially focused on sales of printer ink and toner, also known as "consumables," said Ro Parra, senior vice president for Dell Americas. Dell has an opportunity to capture more of the printer market because of how it delivers replacement ink or toner cartridges to customers, he said.
Home printer users have been trained to look for new ink cartridges in retail stores, which can be a frustrating game of "ink cartridge bingo," Parra said. Dell allows customers to track the ink levels remaining in their cartridges and order new cartridges online by clicking on a link within a print management software application.
Dell thinks customers will appreciate an easier method of buying replacement ink or toner than trolling the aisles of retail stores, Parra said. Dell printer executives did not directly address the issue of third-party replacement cartridges, which usually cost less than cartridges sold by printer vendors, but analysts believe the company also hopes its ink-replacement system will dissuade customers from buying their ink elsewhere.