Dell sees its strongest growth in Asia

BANGALORE, INDIA: With the market recovery, and increasing PC sales, world's third biggest PC maker Dell is seeing a good traction from Asia, especially China and India. Dell India sales soared up by 52 per cent on year on year basis in Q4.

"We're coming off healthy double-digit growth and I'd like to see the business continue on that path (in Asia)," said Steve Felice, Dell's president of small and medium business during the teleconference after announcing the quarterly financial results.

In Asia pacific, including Japan, the revenues of Dell grew by 16 per cent sequentially and around 38 per cent year over year, while in China it grew by 81 per cent becoming the largest market after US, said Felice.

“China generates about $4 billion in annual sales, which is around 7-8 per cent of total Dell's business,” he said.

“We will grow as high as double digit in China. The economy in these countries has been very resilient like China and India with a short-term contraction. In China, we largely aimed at SMB and a lot of business actually came from there. So we were in the right direction in tapping China.”

He added that Perot Systems, which it purchased recently, has a significance presence in Asia. “We have a great presence in China and India and we are pretty optimistic that in a couple of years we can build a big foundation of services in Asia.”

Dell India sales soared up by 52 per cent on year on year basis, while the sequential growth was eight per cent. India revenues comes around $1 billion, which is roughly two per cent of the global business. The BRIC countries namely Brazil, Russia, India and China grew by 13 per cent sequentially and strong 72 per cent year over year.

Talking about India's performance Felice said, “We moved up from a number five position to a second position in the last quarter, which show that India is a very strategic market for us. I believe that we are the faster share taker in India. We have our targets for becoming number one PC brand here.”

He refused to comment of introducing smartphones in India. But said that the consumer and SMB business are growing tremendously. They grew more than hundred per cent while other business showed a substantial performance.

“Some of the areas we are currently focusing at are the various e-governance initiatives, digital and mobile classrooms in education vertical,” he said.

Felice informed that Dell India continues to derive larger pie of the sales through direct than channel, and with the enterprise and corporate vertical dominating the sales.

But investors were still concerned that the company's gross margin fell short of expectations, hurt by sales of lower-priced PCs for consumers and rising costs for memory chips and other components.