Dell 2010 Annual Report Download - page 9

Table of Contents
creation, geographic information systems, computer animation, software development, computer-aided engineering, game
development, and financial analysis.
• Consumer — The Inspiron line of desktop computers is designed for mainstream PC users requiring the latest features for
their productivity and entertainment needs. We target sales of the Alienware line of desktop computers to customers
seeking features ranging from multimedia capability to high performance gaming. Our XPS desktops are designed for
customers seeking high performance for the most demanding entertainment needs.
Financial Services
We offer or arrange various customer financial services for our business and consumer customers in the U.S. through Dell Financial
Services L.L.C. ("DFS"), a wholly-owned subsidiary of Dell. DFS offers a wide range of financial services, including originating,
collecting, and servicing customer receivables related to the purchase of Dell products. DFS offers private label credit financing
programs, through an unrelated, nationally chartered bank, to qualified consumer and commercial customers and offers leases and fixed-
term financing to commercial customers. Financing through DFS is one of many sources of funding that our customers may select. For
additional information about our financing arrangements, see "Part II — Item 7 — Management's Discussion and Analysis of Financial
Condition and Results of Operations — Financing Receivables" and Note 4 of Notes to Consolidated Financial Statements included in
"Part II — Item 8 — Financial Statements and Supplementary Data." Currently, to support the financing needs of our customers
internationally, we have aligned with a select number of third party financial services companies. These financial services companies
work directly with our customers to originate and service financing arrangements, enabling customers to finance and purchase Dell
products and services. We are exploring the possibility of expanding the DFS operations into select international markets, with the
expectation that we will continue to work with third parties where appropriate.
For additional information about our products and services, see "Part II — Item 7 — Management's Discussion and Analysis of Financial
Condition and Results of Operations — Results of Operations — Revenue by Product and Services Categories," and Notes 4 and 16 of
Notes to Consolidated Financial Statements included in "Part II — Item 8 — Financial Statements and Supplementary Data."
Product Development
We focus on developing modular and scalable technologies that incorporate highly desirable features and capabilities at competitive
prices. We employ a collaborative approach to product design and development in which our engineers, 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, such as our enterprise solutions, and services to the market quickly and
efficiently. Our total research, development, and engineering expenses were $661 million for Fiscal 2011, $624 million for Fiscal 2010,
and $665 million for Fiscal 2009.
Manufacturing and Materials
Third parties manufacture the majority of the client products we sell under the Dell brand. We have expanded our use of contract
manufacturers and manufacturing outsourcing relationships to achieve our goals of generating cost efficiencies, delivering products
faster, better serving our customers, and building a world-class supply chain. Our manufacturing facilities are located in Austin, Texas;
Penang, Malaysia; Xiamen, China; Hortolândia, Brazil; Chennai, India; and Lodz, Poland. Beginning in Fiscal 2009, we have reduced
our fixed costs by selling, closing and consolidating manufacturing and other facilities, and have moved toward a more variable cost
manufacturing model. In connection with our implementation of this model, we have announced the sale of our Poland facility, which is
expected to be finalized in the first half of Fiscal 2012. See "Part I — Item 2 — Properties" for information about our manufacturing and
distribution locations.
Our manufacturing process consists of assembly, software installation, functional testing, and quality control. Testing and quality control
processes are also applied to components, parts, sub-assemblies, and systems obtained
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