Dell strengthens hold as mainland's No 2 computer brand

Chinese market share rises to 9pc in September quarter despite 11pc drop in global revenue

PUBLISHED : Saturday, 17 November, 2012, 12:00am
UPDATED : Saturday, 17 November, 2012, 4:13am

Dell strengthened its position as the second-biggest personal computer supplier on the mainland in the quarter to September, despite slumping sales worldwide.

"[Mainland] China is clearly the highlight for us, with the sequential growth [in the past quarter]," Amit Midha, the president of Dell's Asia-Pacific and Japan operations, said yesterday.

Data from technology research firm IDC shows Dell's market share on the mainland, which is the world's largest market for personal computers, rose to 9 per cent from 8 per cent in the quarter to June.

Dell managed to rebound on the mainland after a few quiet quarters there, according to Bryan Ma, IDC's associate vice-president for Asia-Pacific client devices research.

Ma said only Lenovo, with a 34 per cent domestic share, performed better than Dell in the market in the past quarter.

Kitty Fok, a vice-president of IDC Asia-Pacific, said the release of new products, purchases made by students who went back to school in August and September, and improved inventory in distribution channels helped boost sales on the mainland.

But global sales for Texas-based Dell dropped 11 per cent in the quarter to US$13.7 billion, which was less than analysts expected, from US$15.4 billion a year earlier. IDC estimated Dell's total shipments in the third quarter fell 14 per cent year on year to 9.5 million units, for a 10.8 per cent global market share behind industry leaders Lenovo and Hewlett-Packard.

Without elaborating, Midha said Dell's four-year-old strategy to build up its higher-margin enterprise and services business had "great success" on the mainland. Dell is a leading supplier of server computers and storage systems used in the vast data centres of major Chinese internet companies, including top gaming and messaging services provider Tencent, online search kingpin Baidu and e-commerce giant Alibaba Group.

China is Dell's second-largest market after the United States, accounting for about US$5 billion of its annual sales. The company also spends about US$25 billion a year in the market for manufacturing and sourcing of information-technology components and other related products.