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Dell CEO upbeat on China despite slowdown

Dell CEO upbeat on China despite slowdown

By Reuters | Updated: 18 July 2012 11:44 IST

Dell Inc Chief Executive Officer Michael Dell said he remains upbeat about emerging markets such as China, its largest market outside the United States, despite "challenges" and a business slowdown.

China, which accounts for about $5 billion of Dell's annual revenue, has for years picked up the slack as personal computer spending waned in developed markets. Now the world's No.2 economy is decelerating also, though its growth still outpaces that of most countries.

"We are bullish on markets like China, India, Brazil," Dell told Reuters in an interview. The company's founder added that it could also count on Africa, which accounts for $1 billion in annual revenue that is expected to grow exponentially.

But "there are some challenges in China," the CEO told executives and investors at the Fortune Brainstorm tech conference in Aspen Colorado. "Emerging markets are a big deal for us."

Asked if he saw a business slowdown in China, he said: "That would be an accurate statement."

Dell's board will meet in September in China, though the CEO would not talk about what else might transpire there. The world's second-largest economy is growing at its slackest pace in more than three years, according to official data released last week.

China and other emerging markets have long been bright spots for Dell, Hewlett-Packard Co and other personal computer makers struggling to sustain growth as smartphones and tablets eat into sales. Europe's crisis is expected to curtail PC-buying further in the second half.

Asia's top economy remains at the forefront of global growth, and its PC market is expected to far outpace that of the worldwide industry.

But in past weeks, corporations such as microprocessor maker Advanced Micro Devices and chip geam producer Applied Materials have warned that growth in the resilient Chinese market too was trending lower.

While the tablet market remains small, demand for the devices is growing much more quickly than for PCs. Shipments of tablets, including Apple's iPad, are expected to grow 90 percent this year, according to IHS iSuppli.

Despite that exponential growth, the CEO wants to stick to a strategy of serving corporate PC customers. That includes developing both hardware and software to meet their needs.

"We continue to see PCs as an important part of our enterprise business. We are very focused on enterprise solutions and PCs are an important part of that," he said.

"We are building a pretty substantial software business."

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