Dell 2009 Annual Report Download - page 35

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Table of Contents
While mobility unit shipments increased 10% year-over-year, mobility revenue declined 3% as average selling prices declined 12%
due to competitive pricing pressures. Desktop revenue declined 10% year-over-year, and software and peripherals and servers and
networking revenue declined by 9% and 8%, respectively. The slowdown in the global economy during the second half of Fiscal
2009 was a significant contributor to SMB's year-over-year revenue and average selling price decline.
For Fiscal 2009, operating income percentage remained flat year-over-year at 8.5%. However, operating income dollars decreased
5% year-over-year as revenue decreased mainly due to a 6% decline in average selling prices in a competitive pricing environment,
partially offset by a reduction in cost of revenue of 7% year-over-year. As a result, we experienced a slight improvement in our gross
margin percentage.
• Consumer — Consumer revenue increased 9% in Fiscal 2009 from Fiscal 2008 on a unit volume increase of 31%. Average selling
price declined 17% due to our participation in a wider distribution of price bands, including lower average sales prices realized as we
expanded our presence in retail. Mobility revenue grew 29% year-over-year on unit growth of 60%, and desktop revenue decreased
17% year-over-year on a unit decline of 6% as customer preference continued to shift from desktops to notebooks. Also contributing
to Consumer's revenue improvement in Fiscal 2009 were software and peripherals revenue growth of 6% and continued strength in
emerging markets.
Consumer's operating income percentage increased year-over-year by approximately 100 basis points to 2.4%. Operating income was
negatively impacted by a 17% decrease in average selling prices. Additionally, operating expenses declined 19% year-over-year as
we began to realize the benefits from our cost-improvement initiatives.
Revenue by Product and Services Categories
We design, develop, manufacture, market, sell, and support a wide range of products that in many cases are customized to individual
customer requirements. Our products and services are organized between enterprise solutions and client categories. Enterprise solutions
include servers, storage, and related services, software and peripherals. Client includes mobility, desktop products, and also related
services, software and peripherals.
The following table summarizes our net revenue by product and service categories for each of the past three fiscal years:
Fiscal Year Ended
January 29, 2010 January 30, 2009 February 1, 2008
% of % % of % % of
Dollars Revenue Change Dollars Revenue Change Dollars Revenue
(in millions, except percentages)
Net revenue:
Enterprise Solutions:
Servers and networking $ 6,032 11% (7%) $ 6,512 11% 0% $ 6,486 11%
Storage 2,192 4% (18%) 2,667 4% 10% 2,429 4%
Services 5,622 11% 5% 5,351 9% 7% 4,980 8%
Software and peripherals 9,499 18% (10%) 10,603 17% 7% 9,927 16%
Client:
Mobility 16,610 31% (11%) 18,604 30% 4% 17,961 29%
Desktop PCs 12,947 25% (25%) 17,364 29% (10%) 19,350 32%
Total net revenue $ 52,902 100% (13%) $ 61,101 100% (0%) $ 61,133 100%
Fiscal 2010 compared to Fiscal 2009
• Enterprise Solutions
Servers and Networking — The decline in our server and networking revenue during Fiscal 2010 was due to demand challenges
across all Commercial segments and regions. Unit shipments decreased 12% year-over-year, though average selling prices increased
6% year-over-year driven by improved product mix toward our new product lines such as the introduction of our 11th generation
PowerEdgeTM servers during Fiscal 2010.
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