Wednesday, November 24, 2004
EMC's China sales up 43% in Jan-Sep 2004
Reuters Hong Kong, November 24
EMC Corp, the world's top maker of computer data storage products, said on Wednesday its China sales were up 43 per cent in the first nine months of this year, and should grow at least as strongly next year.
The US-based company now counts China as its third biggest market in Asia in terms of sales, but expects it to overtake South Korea for the number two spot next year, EMC's president of Asia Pacific Steve Fitz said in an interview.
He said the company saw its China revenue grow 43 per cent in the first three quarters of this year, well ahead of the 34 per cent sales growth it recorded for the period both in Asia Pacific overall and worldwide.
EMC does not break out revenue by individual country, but said last month that Asia accounted for 11.4 per cent of its overall $2.04 billion in third-quarter sales.
"China will continue to be our fastest growing market worldwide," Fitz said. That's the way we have built the business plan for 2005."
To facilitate its growth in China, EMC, which like many of its peers suffered during the tech downturn in 2000, has been beefing up its presence there.
Fitz said the company's headcount had grown 50 per cent over the last year to 260, and growth should be similar next year.
"It's aggressive, but it'll be close to that," he said.
EMC is now the third biggest seller of corporate data storage products in China, behind IBM and Hewlett-Packard, in a market worth about $650 million in 2004 sales, Fitz said.
EMC trades on a price earnings ratio for the current yearof 38 times, putting it among the five most expensive stocks in the Dow Jones Titans Tech index, according to Reuters data.
Fitz said EMC reckons its market share in China now stands at about 15 per cent, up four percentage points in the last 12 months.
The company, which distributes many of its products through companies such as Dell Inc. and Digital China Holdings Ltd, hopes to keep its China growth going in part through a new manufacturing relationship in south China with Taiwan's Hon Hai Precision Industries Group, Fitz said.
Under that relationship, Hon Hai is making a low-end data storage product retailing for about $5,000 and targeted at small- and medium-sized enterprises.
Since announcing the relationship this summmer, Hon Hai has entered a ramp-up phase for the product, and should be delivering thousands of units a month by the year-end for EMC's worldwide sales network, Fitz said.
"We see exponential growth in that business," he said.
"That business will easily double and potentially triple in the next 12-18 months."
© HT Media Ltd. 2004.