Dell Computer, long known as a direct-to-customer personal computer vendor, expects sales of its non-PC boxes to overtake revenues from its traditional product line this year. 'We do expect that server and storage markets will surpass the PC market in Dell's revenue share,' said Jack Angelo, vice-president of the company's enterprise arm. Dell unveiled its latest, lower-end servers, including the Power Edge 2500, 2550 and SC line, last week. Dell executives also pushed the newest Storage Area Network and Network Attached Storage boxes - technology which helps take on the load of shelving data from over-worked computer systems. The company plunged into the server market in 1999, while sales of its desktop and notebook computers were still high, Mr Angelo said. When it comes to market share of personal computer sales, Dell is second worldwide but has built up expertise - and market share - in other areas such as servers and storage devices. The move to increase its non-PC product base comes at a time when the United States is suffering a decline in its economic growth after years of a booming economy and heady stock market gains. The slowdown has forced many technology companies to cut back on their workforces as clients slowed their product orders. The company already holds 23 to 24 per cent of the US server market. Since it is in the top three server providers, executives expect that Dell could climb its way to the top by 2002. 'In the US we do have a very good chance of ending the year in the No 1 position, surpassing Compaq,' Mr Angelo said. In Hong Kong's server ladder, Dell held the third rung, growing at a rate of 120 per cent a year, said Geoff Healey, head of the enterprise business in Asia Pacific. 'My overall goal is to emulate the success in the US,' Mr Healey said. Research from International Data Corp (IDC), released early in March, showed that the server market in the Asia-Pacific region, excluding Japan, rose 32 per cent in the fourth quarter of 2000 over a year-earlier quarter, to post sales of US$1.79 billion. Overall in 2000, the market grew 33 per cent over 1999, to a total of US$6.3 billion. Server analyst Avneesh Saxena at IDC pointed out that 2001 would see slightly less growth, given the tougher times. But growth would be still strong, due to dropping prices, increased competition, new technology and shorter life cycles. Mr Saxena said after the news conference that the US economic slowdown, if it was going to turn around, would do so by the third quarter of this year. Asia-Pacific's engines would follow suit. Given the economic gloom, Dell is cautiously expanding into other areas, including storage products. Mr Angelo said he saw them as 'the next big hill for us to climb'. 'The margins for these products are sinful,' he admitted. Despite the shift in product mix, the computer company that was founded with US$1,000 by Michael Dell in 1984 has no plans to leave the consumer PC market. 'We'll continue to be in the PC business long-term,' Mr Angelo said. 'The profitability in that business is still there.' Dell was also expanding its manufacturing base in Xiamen, China, by moving into a larger plant and increasing the workforce of about 550 staff members, the executives said. The company has about 40,000 employees worldwide. When asked about how the server market might expand in 2001, the executives said they did not know, given the tough economic environment in the US. Lydia@scmp.com