Dell after 20% of China market

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Dell, the world's largest personal computer maker, on Thursday said it aimed to double market share in China to about 20 per cent, as it expected PC shipments in the country to continue to grow 30 per cent in the second quarter of this year.

Kevin Rollins, chief executive, said Dell had been winning customers from Lenovo, both in China and globally, after the Chinese computer maker bought International Business Machines' PC business this year.

“IBM had a very, very good brand globally. When it stepped out of the industry, the name dropped off. Lenovo is less well known Dell is very well known,” Mr Rollins told a press conference in Hong Kong.

Dell, which first entered China in 1998, has been growing rapidly through its direct-selling model and is now the third-largest PC seller in the country, claiming 8.4 per cent of the market in the first quarter of 2005, according to IDC, the technology consultancy.

Underlying its ambition, Mr Rollins said market share in China “should at least get to the corporate average” of 19 per cent, although he did not give a timetable.

“China is our strategic focus country now,” Mr Rollins added. The country accounts for about 3 per cent of Dell's global sales. The company also manufactures 8 per cent of its computersin China and announced this week that it would double capacity.

If Dell continues its current quarterly growth rate, its ambition could be achieved by 2010.

Dell's shipments of desktop computers, notebooks and servers increased 30 per cent in the first quarter from a year ago. Mr Rollins expected the second-quarter figure to be “in the same range”.

David Miller, Dell's China and Hong Kong co-president, said the company was not trying to overtake Lenovo as the country's largest PC seller.

Lenovo, which became the world's third-largest PC maker after buying IBM in May, sells one in four of the computers sold in China.

Although its market share has been steady over the years, it has been losing some corporate and government customers to Dell.

But while Dell, Lenovo and Founder, China's second-largest PC seller, have been winning market share from smaller players, Bryan Ma, analyst at IDC, said they were all facing reduced margins and prices because of competition. Computer prices in China fell 12 per cent last year.

“Margin is still the one big problem for vendors in China,” Mr Ma said.

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