Dell 2008 Annual Report Download - page 6

Table of Contents
• Optimize the balance of liquidity, profitability, and growth with a focus on increasing the mix of our product portfolio to higher margin products
and recurring revenue streams. We will balance our mix of products and services to increase profitability over time. We are committed to shifting
our solutions portfolio to higher margin solutions and recurring revenue streams in software, servers, services, and storage. Our services business
has growth opportunities both in driving attachment of services onto existing product platforms and expanding into new solution offerings. We
expect to expand our presence in the enterprise solution arena as we add more capabilities that are attractive to existing and new customers. We are
committed to improving our storage and server products and services as evidenced by our new building IT-as-a-Service solution, an integrated
service delivery platform that is simple, modular, and flexible, and which provides businesses with remote and lifecycle management, e-mail
backup, and software license management, among other services. In addition to services, system software presents another opportunity for us to
further strengthen our portfolio.
Product Development
We focus on developing standards-based technologies that incorporate highly desirable features and capabilities at competitive prices. We employ a
collaborative approach to product design and development where our engineers, along with direct customer input, design innovative solutions and
work with a global network of technology companies to architect new system designs, influence the direction of future development, and integrate
new technologies into our products. Through this collaborative, customer-focused approach, we strive to deliver new and relevant products and
services to the market quickly and efficiently. We are continuing to expand our use of original design manufacturing partnerships and manufacturing
outsourcing relationships to generate cost efficiencies, deliver products faster, and better serve our customers in certain product categories, customer
segments, and geographical areas. Our research, development, and engineering expenses were $665 million for Fiscal 2009, $693 million for Fiscal
2008, and $498 million for Fiscal 2007, including acquisition related in-process research and development of $2 million for Fiscal 2009 and
$83 million for Fiscal 2008.
Products and Services
We design, develop, manufacture, market, sell, and support a wide range of products that in many cases are customized to individual customer
requirements. Our product categories include mobility products, desktop PCs, software and peripherals, servers and networking, services, and
storage. See "Part II — Item 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations — Revenue by Product
and Service Categories" and Note 11 of Notes to Consolidated Financial Statements included in "Part II — Item 8 — Financial Statements and
Supplementary Data."
• Mobility — The XPSTM and AlienwareTM lines of notebook computers are targeted at customers seeking the best experiences and designs available,
from sleek, elegant, thin, and light notebooks to the highest performance gaming systems. In Fiscal 2009, we introduced the new stylish Studio line
of consumer notebooks with powerful multimedia elements. The InspironTM line of notebook computers is designed for consumers seeking the
latest technology and high performance in a stylish and affordable package. In Fiscal 2009, we added the 3G enabled Mini, a light, highly mobile
notebook, to the Inspiron line. The LatitudeTM line is designed to help business, government, and institutional customers manage their total cost of
ownership through managed product lifecycles and the latest offerings in performance, security, and communications. The VostroTM line is
designed to customize technology, services, and expertise to suit the specific needs of small businesses. The Dell PrecisionTM line of mobile
workstations is intended for professional users who demand exceptional performance to run sophisticated applications. This year, we also had the
largest global product launch in our company's history with our new E-Series commercial Latitude and Dell Precision notebooks.
• Desktop PCs — The XPSTM and AlienwareTM lines of desktop computers are targeted at customers seeking the best experiences and designs
available, from multimedia capability to the highest gaming performance. The OptiPlexTM line is designed to help business, government, and
institutional customers manage their total cost of ownership by offering a portfolio of secure, manageable, and stable lifecycle products. The
InspironTM line of desktop computers is designed for mainstream PC users requiring the latest features for their productivity and entertainment
needs. The VostroTM line is designed to provide technology and services to suit the specific needs of small businesses. In July 2008, we introduced
the Studio line of compact and stylish consumer desktops, which includes the Hybrid, our most power efficient consumer desktop.
Dell PrecisionTM desktop workstations are intended for professional users who demand exceptional performance from hardware platforms
optimized and certified to run sophisticated applications, such as those needed for three-dimensional computer-aided design, digital content
creation, geographic information systems, computer animation, software development, computer-aided engineering, game development, and
financial analysis.
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