Dell Computer Co. Ltd. announced yesterday that it has become the first international computer maker to focus on China's low-end personal computer market.
Dell's competitors, however, said its move is unlikely to bring major changes to the domestic market.
"We want to make our world-renowned brand affordable to common families in China," said Richard Ward, vice president of Dell, adding that only 15 percent of the households on China's mainland currently own computers.
Dell's SmartPC model, which targets the low-end market, has three product categories focusing on different functions - Internet connection, entertainment and educational programs for kids.
Equipped with a Pantium III processor, a SmartPC sells for about 5,000 yuan (US$600), while on average a computer of other international brands costs more than 9,000 yuan.
"We are challenging Chinese computer makers with a cheaper price, better quality and brand name," Ward said.
Dell said its large scale production helped the company cut its raw material cost, enabling it to offer a low price and at the same time maintain a reasonable profit.
Over the past year, Dell sold 14 million computers worldwide. In the same period, 6 million computers of various brands were sold in China.
In China, its sales agents only serve corporate clients. Individual buyers can order Dell's computers or get product information by phone or via the Internet only.
Its Chinese competitors said Dell's low-price strategy won't have a serious impact on their business as the company's direct sales method is not suitable for the Chinese market.
"Consumers are used to seeing, examining and testing a computer before buying it," said Yang Zhengyu, a marketing official of TCL Computer Technology Co. Ltd. "They are normally discreet as several thousand yuan is a comparatively a big amount of money."
He said Dell needs time to increase its brand awareness among Chinese consumers before the company can convince them to buy its products without testing them first.
Yang, however, admitted that Dell's well-known brand and price advantage could pose a challenge to domestic computer makers.
Lu Xueyin, a marketing official of IBM China Co. Ltd., said her company has already offered similar budget computers to Chinese consumers.
Earlier this year, IBM introduced its Pentium III-equipped A10 computer, which sells for 6,200 yuan.
(Eastday 07/17/2001)
