Various newspaper reports have confirmed that US computer manufacturer Dell Inc. is to pull out of the very low end of the consumer PC market segment in China to concentrate its efforts in the enterprise markets.
Bill Amelio, president of Dell’s Asia Pacific region, cited really aggressive price competition. Local providers such as Lenovo Group, formerly known as Legend, and Founder Group both sell low cost systems based on Advanced Micro Devices chips, as opposed to the slightly more expensive Intel processors favored by Dell. Meanwhile, other suppliers are selling ‘bare bones’ PC models, without any Microsoft’s Windows operating system preloaded onto them and so allowing their systems to be configured with pirated software instead.
Overall, PC sales in the Asia Pacific region are up 20% on last year’s numbers and hit 7.8 million units in the second quarter, according to market watchers with IDC. China’s Lenovo dominated the market, with 12.1% market share, and 14.1% unit growth with Dell putting on 38.8% to take 7.4% and Founder Group growing shipments 28.9% to take 5.3%.
In its second quarter to July 30, Dell said that server shipments in China grew 41%. Overall, the region is Dell’s fourth largest market. IDC has forecast that the China PC market will grow about 19% in 2004.
The company has said that its printing and imaging business is now at a $1 billion annual run-rate, and that printers are being rolled out to be sold in China during the third fiscal quarter.