The world's second largest PC maker Dell Inc said yesterday it will source 28 percent more components from China this year to fuel growth in emerging markets.
The company plans to buy $23 billion of components from Chinese suppliers this year, up from $18 billion in 2007, Michael Dell, chief executive of Dell, said yesterday in Beijing.
"Including last year, this year and expected purchases next year, Dell will purchase $70 billion worth of computer-related supplies and equipment from China," he said.
Dell posted revenue of $16 billion in the fourth quarter ending Feb 1, an increase of 10 percent compared with the year-earlier period. But its revenue in India, China and emerging markets in Europe, the Middle East and Africa was respectively 57 percent, 32 percent and 44 percent.
Dell wants to cut costs by buying more components from China so it can take on rivals like HP, Acer and Lenovo in the emerging markets.
Dell held 7.9 percent of China's PC market in the fourth quarter last year - behind Lenovo, HP and Founder Technology, according to research firm IDC.
Dell's direct sales model is hindering the manufacturer from making inroads into China's growing rural consumer market.
Dell yesterday denied speculation that it's looking for acquisition targets in China. Amit Midha, president of Dell (Greater China), said the company doesn't have plans to acquire smaller players in the country.
"We have a lot of things to do before we can consider ourselves successful here in China Right now, we don't have plans to work with the third or fourth players," he said.
Last year, Dell formed a partnership with China's largest home appliance retailer Gome, to sell computers through its nationwide store network. The company has also opened more customer experience centers in China's second- and third-tier cities.
Midha said Dell wants a presence in 1,200 cities in China by the end of this year - up from 45 cities last year - through its partnership with Gome and by extending its direct sales model.
He said the company also plans to release more low-cost products to challenge rivals such as Lenovo, which holds nearly 30 percent market share.
(China Daily March 21, 2008)
