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IT industry will rebound in 2002, says Dell

Corporate IT spending will recover during the second quarter of next year, according to Kevin Rollins, Dell's president and chief operating officer.

Based on a worldwide survey of chief information officers, which showed that half plan to resume normal spending on IT during the second quarter of 2002, Rollins predicted that a "refreshment cycle" of IT purchases will kick in as companies update year 2000-related IT investments made in 1999.

Rollins' prediction underlines Dell's confidence. The company has become the leader in worldwide PC shipments during the severe downturn in the IT industry. Rollins claimed that much of Dell's success could be attributed to the effectiveness of its customer-focused business model.

Rollins, who drove the company to that business strategy, told delegates at the Nikkei Global Management Forum in Tokyo that Dell's customer relationship management system worked well, particularly after the 11 September attacks on the US.

The company was able to contact most affected parties through its database, which can track down users' postcodes.

Dell's business model has given it a 39% market share in the US corporate users market, Rollins said.

However, he conceded that Dell is not doing as well in the global PC markets. Rollins said the company's PC market share outside the US is 6%, and Dell is trying to reach 40%, which "may take some time to achieve".

The top five PC vendors worldwide only control 45% of the market at the moment, according to figures from analyst International Data Corporation.

Dell also plans to build stronger brand images for its products during the next few years. "As 85% of revenue comes from corporate users, Dell is not a consumer brand," said Rollins. "That is a place where we need to improve."
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