Dell to keep investing in Asia as China slows

Mumbai: Dell Inc plans to keep investing in Asia even as its sales growth in China slows, the computer maker's regional president said on Friday.

"We will continue to invest in Asia," said Steve Felice, president of Dell Asia Pacific and Japan, adding that Dell would likely expand its research and development and call centre facilities in the region, but currently has no plans to expand manufacturing capacity.

"We're going to have to see how the world grows. That will determine where we put resources," he said in a conference call with reporters.

"There could be opportunities to shift activity to Asia," Felice said. "Outside the US our business is growing faster than it is in the US."

The Round Rock, Texas-based company, the world's second-biggest PC maker, has been on a cost-cutting campaign, eliminating 2,200 jobs in the quarter, and slashing about 9 per cent of its workforce over the last year.

But Felice said cost-cutting in Asia would be 'minimal.' Felice acknowledged that the company's sales growth in China has slowed, but declined to be more specific.

Felice said spending by small and medium-sized companies in China has been squeezed by the credit crunch, but he believes the government's $586 billion (Dh2,152.43 billion) stimulus package will help reinvigorate IT spending.

Indian companies are also spending less, he said, but he sees room to grow Dell's market share, especially in the small and medium enterprise and consumer markets, which have powered four quarters of 'hyper growth' for Dell in the country.

Despite the global slowdown, Asia has remained a bright spot for Dell.

Dell said on Thursday that its third-quarter profit fell 5 per cent, to $727 million, as businesses around the world cut back on technology spending.

Global sales slipped 3 per cent, to about $15 billion.

But revenues in the quarter grew 18 per cent in China and 48 per cent in India, Felice said.

Profitability growth

Revenues for Asia as a whole, including Japan, rose 11 per cent, he said.

In the last few years, Dell has ramped up its presence in the Asia-Pacific region, where it has more than 32,000 employees, according to its website.

Dell has factories, research and development facilities, and call centres in India, China and Malay-sia.

About half of the company's revenues come from the United States, while India and China together account for about 5 per cent of sales, Felice said.

"We're getting good profitability growth in Asia," Felice said.

"That helps our overall business be healthy."