Friday, February 28, 2003
Dell plans ambitious growth for China in 2003
Reuters Hong Kong, February 28
The world's No. 2 PC maker Dell Computer Corp aims to bolster its position in China this year with a goal of outpacing overall growth in the market by a factor of three, its top Asia executive said.
Since entering China five years ago, Dell has aggressively built out its local network and is now the nation's No. 3 seller with about five percent of the market, according to preliminary unit shipment figures for 2002 from data tracking firm IDC.
"We have an objective in China and Japan to grow at multiples of the market," Bill Amelio, Dell Asia Pacific/Japan president, told Reuters in an interview in Hong Kong. "If the industry grows at three percent, we want to grow at three times that."
The IDC preliminary data show overall PC shipments to China numbered around 11 million last year versus about nine million in 2001.
With China's PC market expected to grow about 17 percent this year, Dell's bullish forecast means the company believes it can grow by some 50 percent, boosting its market share to about 7.7 percent, said Sieh Tien-yu, an analyst at Merrill Lynch.
Dell showed that it is capable of such rapid growth in the fourth quarter of last year, when its unit sales jumped 72 percent from a year earlier, according to Amelio.
"We're working to keep the growth level up as high as we can and stay profitable," he said.
Dell gained the No. 3 spot in China last year after finishing fourth in 2001 behind IBM, according to IDC.
If it achieves its growth target for 2003, the company would still finish behind China's No. 2 PC seller Founder, which controls about nine percent of the market; and well behind Legend Group Ltd, the leader with 27 percent. Amelio said Dell's China operations are profitable, but acknowledged that margins there are below the company's worldwide average. He did not elaborate on margins.
"We're a high growth part of the company," he said. "We're going to work hard to get our profitability up to the average of the company and beyond. " In a nod to the China's growing importance to its global strategy, Dell eventually aims to make its PC plant in the south China city of Xiamen its primary production facility for all of north Asia, including Japan, Korea and Taiwan, Amelio said.
Computers sold in the region currently come from China, as well as the United States and Dell's other Asian production facility in Malaysia. "Over the long haul, we will support all of North Asia out of the China facility," Amelio said.
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