Dell Inc, the second-biggest PC maker in the world, has started selling a cheap model in China to expand in a market where more than 90 percent of the population doesn't own PCs.
The computer, powered by an Intel Corp processor, was set be sold for between 2,599 yuan (US$336) and 3,999 yuan starting yesterday, Round Rock, Texas-based Dell said in a statement issued in Shanghai.
The price is 69 percent cheaper than the lowest priced model on Dell's China Web site.
PHOTO: AFP
Dell is seeking to bolster sales through low-cost computers in developing markets as earnings growth slowed. Founder Michael Dell returned as chief executive officer in January to help the company regain the market lead after losing it to Hewlett-Packard Co in the fourth quarter last year.
"Faster sales growth in China could really give Dell a boost because of how big the market is and how much potential it has," William Bao Bean, an analyst with Deutsche Securities Co in Hong Kong, said before the briefing. "Smaller cities and towns are really where the growth is in China because incomes are rising and people are shopping for their first computers."
He rates Lenovo Group Ltd (
"We have a lot of opportunity" in the consumer market, Michael Dell told reporters in Shanghai yesterday.
"You'll see a lot more products" like the new PC introduced today, he said.
Dell is visiting Shanghai to introduce the new model and meet with customers.
The new computer, developed in China, consumes less electricity, takes up less work space and was made with first-time users in mind, the company said.
The company is also looking to sell the same computer in other emerging markets such as India and Brazil, said Alex Yung, Dell's China head of small business sales.
Michael Dell said yesterday the company also plans to buy companies to boost its services unit, helping to expand sales outside of its main business of selling PCs. The services business, which includes setting up computer networks and providing customer support, has annual sales of about US$6 billion.
"I'd expect to see acquisitions there," Michael Dell said.
He didn't identify countries or target companies.
About seven in 100 people own PCs in China, compared with two in 100 for India, the company said on Tuesday.
About 25 million PCs were sold in China last year, four times the 6 million in India, it said.
Dell's revenue in China rose 26 percent in the last fiscal year, it said in the release, without specifying an amount. In the fourth quarter ended Feb. 2, the Americas accounted for 61 percent of Dell's sales, down from 64 percent a year earlier.
Asia accounted for 12 percent for both periods.
Shares of Dell rose 0.3 percent to US$22.53 on the New York Stock Exchange composite trading on Tuesday. The stock has gained 5.1 percent in the past six months.
The company ousted former CEO Kevin Rollins after less than three years and reinstated founder Dell on Jan. 31, the same day it said sales and profit would miss forecasts for the fourth quarter.
Net income for the quarter ended Feb. 2 fell 37 percent to US$637 million from US$1.01 billion a year earlier, while sales declined to US$14.4 billion from US$15.2 billion, the company reported. The earnings are preliminary because of an accounting investigation.
Tropical Storm Gaemi strengthened into a typhoon at 2pm yesterday, and could make landfall in Yilan County tomorrow, the Central Weather Administration (CWA) said yesterday. The agency was scheduled to issue a sea warning at 11:30pm yesterday, and could issue a land warning later today. Gaemi was moving north-northwest at 4kph, carrying maximum sustained winds near its center of up to 118.8kph and gusts of 154.8kph. The circumference is forecast to reach eastern Taiwan tomorrow morning, with the center making landfall in Yilan County later that night before departing from the north coast, CWA weather forecaster Kuan Shin-ping (官欣平) said yesterday. Uncertainty remains and
SEA WARNING LIKELY: The storm, named Gaemi, could become a moderate typhoon on Wednesday or Thursday, with the Taipei City Government preparing for flooding A tropical depression east of the Philippines developed into a tropical storm named Gaemi at 2pm yesterday, and was moving toward eastern Taiwan, the Central Weather Administration (CWA) said. Gaemi could begin to affect Taiwan proper on Tuesday, lasting until Friday, and could develop into a moderate typhoon on Wednesday or Thursday, it said. A sea warning for Gaemi could be issued as early as Tuesday morning, it added. Gaemi, the third tropical storm in the Pacific Ocean this typhoon season, is projected to begin moving northwest today, and be closest to Taiwan on Wednesday or Thursday, the agency said. Today, there would likely
DISRUPTIONS: The high-speed rail is to operate as normal, while several airlines either canceled flights or announced early departures or late arrivals Schools and offices in 15 cities and counties are to be closed today due to Typhoon Gaemi, local governments announced last night. The 15 are: Taipei, New Taipei City, Taoyuan, Tainan, Keelung, Hsinchu and Kaohsiung, as well as Yilan, Hualien, Hsinchu, Miaoli, Chiayi, Pingtung, Penghu and Lienchiang counties. People should brace for torrential rainfall brought by the storm, with its center forecast to make landfall on the east coast between tonight and tomorrow morning, the Central Weather Administration (CWA) said. The agency issued a sea warning for the typhoon at 11:30pm on Monday, followed by a land warning at 11:30am yesterday. As of
CASUALTY: A 70-year-old woman was killed by a falling tree in Kaohsiung as the premier warned all government agencies to remain on high alert for the next 24 hours Schools and offices nationwide are to be closed for a second day today as Typhoon Gaemi crosses over the nation, bringing torrential rain and whipping winds. Gaemi was forecast to make landfall late last night. From Tuesday night, its outer band brought substantial rainfall and strong winds to the nation. As of 6:15pm last night, the typhoon’s center was 20km southeast of Hualien County, Central Weather Administration (CWA) data showed. It was moving at 19kph and had a radius of 250km. As of 3pm yesterday, one woman had died, while 58 people were injured, the Central Emergency Operation Center said. The 70-year-old