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Dell says China shipments up over 40 pct in Q1

Written by: Staff
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SHANGHAI, Mar 22 (Reuters) Dell Inc. is growing at more than twice the market rate in China this quarter, after sharp gains at the end of last year, Chairman Michael Dell said on Wednesday.

The world's top PC maker expects shipments in its third-largest market to rise more than 40 per cent in the current quarter, outperforming broader China market growth expected at 15 to 16 per cent, he said in China during an Asia visit.

''China ... now is the third-largest market in the world for Dell,'' Dell told reporters at a news briefing. ''If unit growth is 40 per cent (in China in the first quarter) and market growth is 15 or 16, we are very happy.'' He did not elaborate if the growth rates were year on year or quarter on quarter. But the China PC market grew about 15 per cent last year and is expected to grow another 15 per cent this year, according to International Data Corp.

Dell stock fell 1.6 per cent in after-hours trade on Tuesday after Microsoft Corp. said it would delay the release of its consumer Vista operating system, which memory chip and computer makers had hoped would rev up sales later this year.

The world's biggest software maker said it planned to push back the consumer launch of Vista to January 2007 from its earlier target of the second half of 2006. Microsoft plans to launch a corporate version in November.

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

Despite rapid growth in China -- now a SHANGHAI, Mar 22 (Reuters) Dell Inc. is growing at more than twice the market rate in China this quarter, after sharp gains at the end of last year, Chairman Michael Dell said on Wednesday.

The world's top PC maker expects shipments in its third-largest market to rise more than 40 per cent in the current quarter, outperforming broader China market growth expected at 15 to 16 per cent, he said in China during an Asia visit.

''China ... now is the third-largest market in the world for Dell,'' Dell told reporters at a news briefing. ''If unit growth is 40 per cent (in China in the first quarter) and market growth is 15 or 16, we are very happy.'' He did not elaborate if the growth rates were year on year or quarter on quarter. But the China PC market grew about 15 per cent last year and is expected to grow another 15 per cent this year, according to International Data Corp.

Dell stock fell 1.6 per cent in after-hours trade on Tuesday after Microsoft Corp. said it would delay the release of its consumer Vista operating system, which memory chip and computer makers had hoped would rev up sales later this year.

The world's biggest software maker said it planned to push back the consumer launch of Vista to January 2007 from its earlier target of the second half of 2006. Microsoft plans to launch a corporate version in November.

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

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

Dell said, however, that the company posted strong growth in the fourth quarter ''increasing by more than three share points during the fourth quarter of last year''.

IDC put the company's China share for the quarter at 9.1 per cent, compared with the 8.2 per cent third quarter figure and 7.5 per cent in the fourth quarter of 2004.

The company previously said it should be able to eclipse the 10 per cent share threshold by the end of this year.

Dell is the third largest PC seller in China, behind homegrown players Lenovo Group Ltd., with 36 per cent share in the fourth quarter, and Founder Group, with 12.5 per cent share for the period, according to IDC.

The U.S. PC maker has said it expected its Asian business to grow well ahead of the broader industry this year, maintaining a rapid expansion in its fastest growing region.

Among individual Asia markets, China sales grew 28 per cent in terms of units last year. India -- where Dell recently announced preliminary plans for a new factory -- grew 43 per cent and South Korea grew 78 per cent.

To fuel its China and broader Asia expansion, Dell recently opened a second PC assembly plant in south China to service its north Asia region. It said it was also adding 200 new jobs at its China design center this year.

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.

REUTERS SD SND1618 billion market for Dell -- analysts had said the PC giant might be stumbling there after its market share slipped to 8.2 per cent in last year's third quarter from 9.6 per cent in the second, reversing steady gains over previous years.

Dell said, however, that the company posted strong growth in the fourth quarter ''increasing by more than three share points during the fourth quarter of last year''.

IDC put the company's China share for the quarter at 9.1 per cent, compared with the 8.2 per cent third quarter figure and 7.5 per cent in the fourth quarter of 2004.

The company previously said it should be able to eclipse the 10 per cent share threshold by the end of this year.

Dell is the third largest PC seller in China, behind homegrown players Lenovo Group Ltd., with 36 per cent share in the fourth quarter, and Founder Group, with 12.5 per cent share for the period, according to IDC.

The U.S. PC maker has said it expected its Asian business to grow well ahead of the broader industry this year, maintaining a rapid expansion in its fastest growing region.

Among individual Asia markets, China sales grew 28 per cent in terms of units last year. India -- where Dell recently announced preliminary plans for a new factory -- grew 43 per cent and South Korea grew 78 per cent.

To fuel its China and broader Asia expansion, Dell recently opened a second PC assembly plant in south China to service its north Asia region. It said it was also adding 200 new jobs at its China design center this year.

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.

REUTERS SD SND1618

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