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Dell sees industry-beating growth in Asia for '06

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CIOL Bureau
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Doug Young

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SHANGHAI: Dell Inc., the world's top PC maker, expects its Asian business to grow well ahead of the broader industry this year, maintaining a rapid expansion in its fastest growing region, its Asia chief said on Friday.

The broader PC industry in Asia, excluding Japan, grew 18 percent last year, and is expected to grow another 13 percent this year, according to data tracking firm IDC.

"We're still targeting to grow at a multiple of the industry," said Steve Felice, who recently became Dell's sole Asia Pacific chief after Bill Amelio took over as global CEO of rival Lenovo Group Ltd.

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"As far as the long term ... we certainly have the opportunity to grow as we have historically here. We still have plenty of opportunity in China, India, Australia, Japan," he told reporters in a teleconference.

Earlier Dell had announced its global fiscal fourth quarter results, saying its Asia Pacific business grew 21 percent in terms of revenue and 27 percent in unit sales.

The company posted global fourth quarter revenue of $15.2 billion, up 12.8 percent from a year earlier. Net income rose a better-than-expected 52 percent to $1.01 billion.

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Among individual Asia markets, China sales grew 28 percent in terms of units. India -- where Dell recently announced preliminary plans for a new factory -- grew 43 percent and South Korea grew 78 percent. Felice said that as a whole, Asia remains Dell's fastest growing regional market.

Despite rapid growth in China -- now a $2 billion market for Dell -- company watchers had said the PC giant might be stumbling there after its market share slipped to 8.2 percent in last year's third quarter from 9.6 percent in the second, reversing steady gains over previous years.

China passed Japan in Dell's fiscal third quarter last year to become its No. 3 global market in terms of unit sales, behind the United States and Britain.

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Final fourth-quarter data for China has yet to be released, but Felice said he expects Dell's market share there to return to a growth track for the quarter, with the possibility of eclipsing the 10 percent mark in 2006.

"It's certainly possible," he said. "If you do the straight math ... then we should be able to get above that."

Dell's third-quarter market share made it China's third largest PC seller, behind leader Lenovo at 34.5 percent and Founder Group at 12.7 percent. Hewlett Packard Co., Dell's biggest global rival, was China's fourth biggest seller in the third quarter with a 7.5 percent share.

In the region, Felice dismissed a looming threat from Lenovo, which is planning a major new global campaign in the mid- to low-end notebook PC business targeting smaller corporate clients -- a traditional Dell strength.

"We're doing very well here and we fully intend not to lose any ground in our strength here," he said. "They'll do the best they can, we'll do the best we can. It'll be healthy competition."

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