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October 16, 2006 Paul Bell, President EMEA Steve Felice, President APJ
© Dell Inc. 2006
including dependence on several single-source supplier relationships The ability to effectively manage operating costs The ability to attract and retain qualified personnel The level of demand for the products and services Dell offers The ability to manage inventory levels to minimize excess inventory.Special Note • Statements in this presentation that relate to future results and events (including statements about Dell’s anticipated financial and operating performance) are based on Dell’s current expectations. unexpected regulatory changes. reserves and other balance sheet items that may affect the company’s previously reported financial results. business and industry conditions The level and intensity of competition in the technology industry and the pricing pressures that have resulted The outcome of the SEC and Dell Audit Committee investigations into certain accounting and financial reporting matters. terrorism. including issues relating to accruals. including: General economic. customer and geographic sales mix The ability to timely and effectively manage periodic product transitions Reliance on third-party suppliers for product components. 2006 . natural disasters and public health issues on the global economy generally. declining inventory values and obsolescence The effect of armed hostilities. political instability. trade protection measures. tax laws and fluctuations in foreign currency exchange rates The ability to accurately predict product. and the impact of any restatement of financial statements or other actions that may be taken or required as a result of such investigations Dell's inability to meet NASDAQ requirements for continued listing as a result of its delayed quarterly report filing Litigation and governmental investigations or proceedings arising out of or related to such accounting and financial reporting matters. or any restatement of Dell's financial statements Local economic and labor conditions. • Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties. 2 IR © Dell Inc. on the level of demand for Dell's products and services and on Dell's ability to manage its supply and delivery logistics in such an environment • More information about these and other factors affecting Dell's business and prospects is contained in Dell's periodic filings with the SEC.
President APJ • Question & Answer 3 IR © Dell Inc. VP IR & Global Corporate Communications • Europe.Agenda • Introduction Lynn A. Tyson. 2006 . President EMEA • Asia-Pacific / Japan Steve Felice. Middle East. Africa Paul Bell.
S. 7% Amer Int’l 21% EMEA 14% APJ Dell FY07 Q2 3 Year CAGR U. with only 13% share • Non-U. 70% of global IT spending is outside of the United States 70% of global IT spending is outside of the United States Dell FY07 Q2 Revenue Mix • Only 4% share of $1.S. 2006 and Company Estimates IR © Dell Inc.S.K. Sept.S. 20% France 22% Canada 21% 4 Brazil 44% Russia 66% India 51% China 29% Source: IDC Worldwide Quarterly PC Tracker.Dell Has Significant Growth Potential Outside the U. 2006 .3 trillion global IT market and 7% share of $770B addressable IT market • # 1 worldwide PC/x86 share of 19% • # 2 outside the U. 3 year revenue CAGR of 22% 58% U.
services and S&P • International investments will scale over time Source: IDC Worldwide Quarterly PC Tracker.International Business is Key Component of Long-Term Growth Goals Projected Industry PC/x86 Unit Growth through 2010 indexed for Dell Share 50% Developing Regions Unit Size 40 Dell CYQ2'06 Share US and Canada 30 Mature Regions Unit Size 20 Japan 10 West Europe APAC ex-Japan Latin America 20M Units EMEA ex-Western Europe 15 0 0 5 10 Projected 5-Year CAGR 20% • Developing regions represent largest opportunity to build share • Expand enterprise. Sept. 2006 . 2006 and Company Estimates 5 IR © Dell Inc.
lead with enterprise • Most efficient BTO. 2006 . JIT inventory • Build close to the customer • Direct to customer and growing custom solutions • Build Direct relationships while being flexible to local practices • Best CE and expanding commercial services • Build and evolve leading service model 6 IR © Dell Inc.Adapting Our Value Proposition to Grow Globally Dell’s strategy tailored to developing and mature countries Dell’s strategy tailored to developing and mature countries Value Proposition Brand Segment Focus Products Mfg & Supply Chain Marketing & Sales Service & Support Mature Countries • Direct model • Strong share in all segments • Performance and price Developing Countries • Global premium vs. local/white box • Largest addressable profit pools • Best quality.
Extending Strength in Core Business to Growth Opportunities in Europe. and Africa Western Europe 18% Share Central / East Europe 4% Share Africa 10% Share Middle East 9% Share • Began operations in 1987 • Headquartered in Bracknell. • 17.K. U. 2006 . Sept.000 employees across region • #2 in total share position at 14% Enterprise Command Centers Manufacturing Facilities Customer Contact Centers Regional Offices Source: IDC Worldwide Quarterly PC Tracker. 2006 and Company Estimates • 1 Manufacturing Center in Ireland with Poland to be operational in FY ‘08 • 1 Enterprise Command Center 7 IR © Dell Inc. Middle East.
up from 8% just 5 years ago #1 #1 25% 20% #2 15% #3 #2 CY00 Q2 CY06 #3 #4 #4 10% Western Europe 18% share. and Africa PC/x86 Share in EMEA Maturing 30% Developing • Growing share across regions and countries Combined EMEA share of 14%. 2006 . 2006 and Company Estimates 8 IR © Dell Inc. Middle East.Consistent & Balanced Growth Across Europe. Sept. with 43% share in large corporate accounts Only 7% share in EMEA exWestern Europe 5% 0% UK Holland France Germany Italy Cen/East Eur Mid East So Afr Q2 ‘07 Growth 4% Premium* 8% 0% 5% 6% 26% 19% 33% * Dell growth in excess of the industry ex Dell Note: All growth rates and share gains are Y/Y unless otherwise stated Source: IDC Worldwide Quarterly PC Tracker.
000 employees across region China/HK 10% Share Japan 16% Share Korea 6% Share South Asia 7% Share Australia / New Zealand 16% Share • #2 in total share position at 11% • 3 Manufacturing Centers • 3 Enterprise Command Centers Enterprise Command Centers Design Centers Manufacturing Facilities Customer Contact Centers Regional Offices Source: IDC Worldwide Quarterly PC Tracker.Fully Developed & Evolved Operations in Asia Pacific and Japan • Began operations in 1993 • Headquartered in Singapore • 12. 2006 and Company Estimates 9 IR © Dell Inc. 2006 . Sept.
2006 . up from 5% just 5 years ago Combined growth multiple of 2. 2006 and Company Estimates 10 IR © Dell Inc. Sept.Consistent & Balanced Growth Across Asia Pacific and Japan PC/x86 Share in Top 5 Asian Countries #2 16% #2 • Gained share across nearly all countries last quarter #3 Top 5 countries represent almost 85% of the region #4 #6 Combined share of 12%.3x the industry ex Dell 12% 8% 4% 0% A us t / N Z J a pa n C hina / H K India S Ko re a Q2 ‘07 Growth 21% Premium* CY00 Q2 CY06 20% 12% 66% 14% * Dell growth in excess of the industry ex Dell Note: All growth rates and share gains are Y/Y unless otherwise stated Source: IDC Worldwide Quarterly PC Tracker.
Diversified Portfolio Not Reliant On Any One Country No other vendor has experienced the same balanced growth No other vendor has experienced the same balanced growth Total APJ Total APJ Q2 Unit Growth Lenovo DELL HP Founder NEC Q2 Share 17% 11% 11% 5% 5% NEC DELL F-S Toshiba Sony Japan Japan Q2 Unit Growth Q2 Share 20% 16% 16% 9% 7% China // HK China HK Q2 Unit Growth Lenovo Founder DELL HP Tongfang Q2 Share 35% 13% 10% 8% 6% 23% 27% 13% 35% -3% -2% 15% 30% 35% 37% 23% Australia // NZ Australia NZ Q2 Unit Growth HP DELL Acer Toshiba Lenovo Q2 Share 22% 16% 12% 8% HP HCL Lenovo DELL Acer India India Q2 Unit Growth Q2 Share 20% 14% ASEAN Countries ASEAN Countries Q2 Unit Growth Acer HP DELL Lenovo Toshiba Q2 Share 15% 6% 20% 49% 44% 82% 9% 7% 5% 5% 16% 8% 15% 10% 6% 4% -22% 6% Source: IDC Worldwide Quarterly PC Tracker. Sept. Singapore. Indonesia. Philippines. Cambodia. Thailand. 2006 and Company Estimates 11 ASEAN Countries = Brunei. 2006 IR . Vietnam © Dell Inc. Laos. Malaysia. Myanmar.
2006 . 2006 and Company Estimates 12 IR © Dell Inc.China Remains the Largest Opportunity Dell’s Share of Total PC/x86 Units 10% 8% 6% 4% 2% 0% 2002 2003 2004 2005 Q2 '06 • Proven the Model works in China #3 Launched Direct 8 yrs ago .gained share every year Grew revenues almost 30% annualized over last 4 years Expanding reach to additional cities • Grew revenues 31% in Q2. >2B run rate Unit growth of 37%. #3 in share at 10.Dell is #2 Note: All growth rates and share gains are Y/Y unless otherwise stated Source: IDC Worldwide Quarterly PC Tracker. Sept.3% #1 server vendor with 26% share SMB is the fastest growing segment .
Sept. 2006 . gained 2 pts of share #1 in Large Corporate with 46% share 2002 2003 2004 2005 Q2 '06 0% India growth strategy • Building new factory to be operational early next year • Building out sales capabilities & building brand • Expanding Product & Services portfolio Note: All growth rates and share gains are Y/Y unless otherwise stated Source: IDC Worldwide Quarterly PC Tracker. 2006 and Company Estimates 13 IR © Dell Inc.Making Investments for Growth in India Dell’s Share of Total PC/x86 Units 8% #4 • One of the fastest growing countries in the world Expected to grow 25%+ annually long term 6% 4% • Dell growing rapidly with further opportunity to accelerate growth Revenues up >40% annually over last 4 yrs 2% Units up 82% last qtr.
2006 . balanced and quality growth across our nonUS regions is unmatched in the industry 14 IR © Dell Inc.Summary • International customers are embracing direct relationships with Dell • We are investing to fully develop our capabilities and capture profitable expansion overseas • Our consistent.
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