Bloomberg News

Dell’s China Sales Should Rebound This Quarter, Asia Chief Says

October 26, 2012

Dell Inc. (DELL:US) forecast a “significant uptick” in China this quarter after experiencing its first sales decline in the world’s largest PC market.

Slower economic growth and Chinese consumers holding back purchases before today’s release of Microsoft Corp.’s Windows 8 software caused last quarter’s drop, Amit Midha, president of Dell’s Asia division, said in a phone interview. Sales of servers and storage weren’t affected, indicating it was a PC- demand issue, he said.

Chief Executive Officer Michael Dell said in July the company faces “challenges” in China, and the following month Round Rock, Texas-based Dell reported its first decline in total sales (DELL:US) for the country. The PC maker cited “particular softness and pricing pressure” in China as contributing to an 18 percent drop in second-quarter net income to $732 million.

“It’s really a PC-driven piece and we believe this is short term and it’s going to rebound back,” Midha said. “There is a significant uptick as we have gone through this quarter versus the previous quarter.”

The company reports fiscal third-quarter results Nov. 15.

Dell’s share of the global PC market fell to 10.5 percent in the third quarter from 11.2 percent a year earlier, market- researcher Gartner Inc. said Oct. 10. Hewlett-Packard Co. (HPQ:US)’s six- year reign as the world’s top personal-computer maker was ended by China’s Lenovo Group Ltd. (992), Gartner data showed. Lenovo accounted for 15.7 percent of shipments last quarter, compared with 15.5 percent for Hewlett-Packard, Gartner said.

Dell will continue to be a significant player in PCs while focusing on high- and medium-priced products, Midha said.

“We want to make sure we continue to deliver high-value added products to the customer, and not necessarily go down to the lowest price points,” Midha said. “It’s not a unit game.”

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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