China, India seen to drive Dell’s business

China, India seen to drive Dell’s business

Taipei: Dell Inc., maker of the world’s No. 2 personal computer (PC) brand, said on Friday it hopes to see revenue grow on an annual basis from 2010, driven by increasing demand from China and India.

“China appears to be emerging fastest out of the financial crisis," Steve Felice, Dell’s president for small and medium business, said. “India appears to be coming out as well."

The firm’s revenue in Asia fell 21% from a year ago in the second quarter (Q2), as consumers and firms pulled back on their IT spending.

In China, Felice said, “The company is considering expanding its reach outside of the top-tier cities such as Beijing and Shanghai to help it grow in the world’s second largest PC market after the US."

“We don’t have a very big presence in the rural communities," Felice said. “Our focus has been in the top-tier cities, and we’re in the process of expanding our reach, but we want to do it profitably and we want to make sure we’re doing it in a prudent manner."

Lenovo Group Ltd has been among the biggest beneficiaries of China’s move to encourage domestic spending, with more than half of all PCs sold under a stimulus package to boost the purchase of electronics in rural communities carrying its brand name.</p><p>In contrast, global rivals such as Hewlett-Packard Co., Acer Inc. and Dell took less than 1% each, according to Chinese government figures.

Dell has been betting on a replacement cycle from 2010, helped by Microsoft Corp.’s next-generation Windows 7 operating system, to help pull it out of the current slowdown.

The firm posted a net profit of $472 million (nearly Rs2,310 crore) in Q2 ended 31 July, down from $616 million in the year-ago period. Revenue fell 22% to $12.8 billion, but came in ahead of Wall Street’s estimate of $12.6 billion.

Dell is the second PC firm after Acer to see stronger-than-expected profit margins. On Thursday, Acer also reported gross margins that exceeded most expectations, helping boost its share price on Friday.