Dell Sees Growth in Asia

Dell Inc. expects shipments of personal computers, notebooks and servers in Asia excluding China, Japan and South Korea to grow almost 20 percent in 2007, a company executive said Thursday.

Dell's president for Asia Pacific South, Paul-Henri Ferrand, did not give a figure for the 2006 shipments for the same market but said shipments for the whole of Asia, including China, Japan and South Korea, reached 3.5 million units per quarter last year.

Dell, which was recently displaced by Hewlett Packard Co. as the world's largest PC maker, plans to change the way it sells its products to help boost sales in the region, Ferrand said at a media briefing.

Dell is the No. 2 maker of PCs with 15 percent of the global market, compared with HP's 19 percent, according to the most recent figures by technology research companies Gartner and IDC.

Ferrand said Dell, which has long relied on a direct-to-consumer business model in which buyers place orders online or by telephone, was exploring opportunities to sell its products to consumers through retailers and distributors in the region.

Last month the company started selling a few systems at Wal-Mart Stores Inc. in the United States.

"What we have realized lately is that the direct model should not just be a religion," Ferrand said. "Because what we've seen is that some consumers, especially in Asia, want to go to a store to touch, see, feel, compare. And some are not used to going on the Web, or on the phone, to order."

Ferrand emphasized, however, that the company still viewed the direct sales model as effective.

Since its founding in the 1980s, Dell has relied on selling PCs and other products directly to consumers and business customers over the phone and Internet. It viewed direct sales as an important cost advantage over competitors who sold computers through retailers.

The strategy worked, helping Dell become the world's leading PC maker. But last year, the Round Rock, Texas-based company lost its lead to a revitalized Hewlett-Packard Co., which now sells systems online, by phone and in stores.

In Asia, Ferrand said, the expansion of Dell's distribution network, which would take place "in the next few quarters," may take different forms and not necessarily copy the Wal-Mart model.

"Wal-Mart is just a test...We want to customize our approach per country," Ferrand said without elaborating.


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