Dell Poised To Sell More PCs In Emerging Markets
Posted on: Tuesday, 23 September 2008, 12:20 CDT
Dell Inc Chief Executive Michael Dell said on Tuesday that the addition of sales of PCs in brick-and-mortar stores rather than exclusively online should help consumers in emerging markets purchase their first computer.
For many years, Dell existed as an online-only distributor of PCs and PC-related hardware. However, the world’s second-biggest computer maker recently made the transition into retail stores, giving consumers who do not have access to the Internet a chance to purchase a PC.
Asked at an emerging markets conference organized by the Economist whether he aimed to sell consumers in emerging markets their second computer, once they were already online, he replied: "With 15,000 stores, we want to sell all the PCs."
Last week, Dell announced that slowing demand had spread from the United States to Europe and Asia, and had not rebounded as expected after the summer lull.
“The company is seeing further softening in global end-user demand in the current quarter," Dell, said in a brief statement last Tuesday, ahead of a presentation at a Bank of America investment conference later in the day.
Analysts foresee a bleak future for the technology sector, noting that while it has held up well, it may be due for a downturn after dodging several bullets coming from crises in the credit and mortgage markets.
Dell gets about 80 percent of its business from businesses and government agencies, so its results are likely not indicative of the overall health of consumer spending on computers.
Pim Dale, who heads Dell's operations in European, Middle Eastern and African emerging markets including Russia, said demand in Russia was "robust" although it was too early to judge the fallout from last week's banking sector meltdown.
Dell’s staff in Russia will more than double by Christmas as it expands its data center and consultancy businesses.
Michael Dell said Russia was a "great" market to which Dell remained committed, despite political turbulence there and high tariffs on some IT products.
"When markets go through these perturbations you have to be there to support your customers," he said.
In the BRIC countries (Brazil, Russia, India and China) overall, Dell had revenue growth of 41 percent on a 46 percent increase in units last quarter, which it said was more than three times the industry growth rate.
"Five hundred thousand new users are coming on line every day, and a large proportion of these are in emerging economies," said Michael Dell.
He added that growth in cellphone sales in developing markets boded well for PC sales. "Users tend to buy their first PC about three years after buying their first cellphone."
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Source: redOrbit Staff & Wire Reports
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