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Dell gets ready for rural push

By Wang Xing (China Daily)
Updated: 2009-08-29 09:31

US computer maker Dell Inc said on Friday that it would continue to expand its reach outside the top tier cities as it steps up its efforts to fuel growth in China.

Steve Felice, president, small and medium business, Dell, said on Friday that the company would expand its network in the mainland to lower-tier cities and rural areas for further growth.

"We don't have a very big presence in the rural communities," Felice said. "Our focus has been in the top tier cities, and we are now in the process of expanding our reach."

But he said Dell would maintain its profitability during the expansion and conduct the whole process "in a prudent manner".

The world's second largest PC maker posted 21 percent decline in revenue in the second quarter, as consumers and companies reduced their spending on technology products amid the economic slowdown.

Related readings:  Dell targets China's SMB market  China 'engine' for Dell  Analysts: Dell to launch smartphones in China by year-end  Dell's PC shipments in China grow 28%

Felice said China appears to be emerging fastest out of the financial crisis. He said increasing demand from emerging countries like China and India would help grow revenues on an annual basis from 2010 onwards.

As part of its efforts to stimulate the domestic consumer market, the Chinese government launched a program earlier this year to give subsidy to PC buyers in rural areas, where most people do not have computers.

But foreign companies like Dell and HP only took less than 1 percent each of this market that saw 110,000 new computers being sold in the past three months. Lenovo Group, the country's largest domestic vendor, accounted for nearly half of the sales.

Felice confirmed on Friday that Dell is teaming up with China Mobile to develop smart phones in the country, but declined to disclose details. It was expected that China Mobile would launch the device as early as next Monday.