European customers have begun buying Dell PCs in bulk over the Internet, according to the company's chief financial officer, Tom Meredith.
Speaking at the Hambrecht & Quist Technology Conference in San Francisco yesterday, Meredith said Dell's European business is currently on target to reach $250 million in sales over the Internet.
Last April, 'VNU Newswire' revealed that Dell would cut the cost of buying PCs with its European Internet sales initiative and Meredith said: "A year ago we were told it would be US-centric. Wrong answer."
He added that Dell Europe's Internet based sales figures are growing faster than in the US, where they have risen from $1 million per day a year ago to $4 million per day now.
The Internet based business will help the direct vendor challenge IBM to be the number two supplier of PCs worldwide, according to Meredith. "We are only 60,000 to 80,000 units behind," he said.
Dell's evolving direct strategy will maintain the company's growth, Meredith claimed, with initiatives to improve customer satisfaction, extend its Internet sales sites and continue implementing continuous flow manufacturing methods.
But Intel's Celeron chip, for sub-$1,000 PCs, will not be part of Dell's plans, Meredith said.
"We do not see the cost structure and profit pool to go after that market. Mendocino [Intel's next iteration of Celeron] may be more interesting," he said.
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