To: T.R. who wrote (60045 ) 8/21/1998 11:48:00 AM From: Mohan Marette Read Replies (1) | Respond to
Direct Approach - All about Dell & China.Dell has only about 1 percent of China's small but fast-growing personal computer market, according to estimates. International Data Corp. projects sales in China will grow more than 30 percent this year to about 4 million machines, compared with 8 million in Japan and 36 million in the United States. But few doubt that China, with its huge population and growing economy, will become a critical PC market. Tenth now among countries, it is projected to surpass Japan as No. 2 by 2002, said Bruce Stephen of International Data Corp. Dell is building a server manufacturing site in Northeast Austin, plans a third plant in Limerick, Ireland, and expects to announce a site in Brazil late this year or early next year. Like Germany's, China's PC market is notable for its strong local companies. White Box PC, a Chinese company, had about 33 percent of the market in the first quarter of 1998, followed by Legend, also Chinese, with 12 percent, according to Dataquest. Rounding out the top five were IBM, Hewlett-Packard Co. and Compaq Computer Corp., each with about 7 percent. Compaq already makes computers in China with a joint-venture partner. IBM has an advantage because it has done business in China for years and has a strong brand identity, Stephen said. Dell, which expects to employ about 200 workers initially at its plant in Xiamen, on China's southern coast, opened the facility to avoid import tariffs and keep manufacturing costs low, said spokesman T.R. Reid. He said local officials also offered financial incentives, which Dell wouldn't disclose. Typically in new markets, Dell builds its business through a network of local distributors who meet with customers and place orders for them. Those distributors still will work with Dell in China's less-populated regions, while the direct-sales system of ordering computers via phones or the Internet will be offered in Beijing, Shanghai, Guangzhou, Xiamen and five other metropolitan areas. Half of Dell's sales in China are to multinational companies, followed by telecommunications companies, government agencies and financial companies, said Jim King, Dell's vice president of sales and marketing in China. austin360.com
