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Dell looks to global market
March 30, 1998: 12:23 p.m. ET

Company will sell direct in China; teams up with Wang Global in Europe
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NEW YORK (CNNfn) - Dell Computer Corp. announced Monday that it will start selling in China by the end of the year. In a separate announcement, Dell said it had entered into a partnership with Wang Laboratories Inc. to provide services for Dell's business customers in Europe.
     Dell has been marketing in China through a network of distributors. Although the company did not set a timetable on when it would begin selling directly, it has bought land in China and is opening a sales, manufacturing and customer center in Xiamen, in the Fujian province.
     "One of the major reasons for our investment in China is to set the platform, the foundation and the infrastructure to support our customers for the decades ahead," said Phil Kelly, Dell's Asia Pacific president. "We are building a team and we should be shipping products there later this year."
     Morton Topfer, Dell vice chairman, said the company will initially ship desktops, notebooks and servers. He added that Dell was likely to continue working through distributors for a while.
     In its fourth quarter ended Feb. 1, much of Dell's growth in Asia was driven by China. Asian sales surged 79 percent to $240 million despite regional economic problems.
     Peter Labe, a technology analyst at Buckingham Research Group, said Dell's toughest challenge will be getting the Chinese market accustomed to its method of direct selling.
     "It took quite a while for Japan to accept direct marketing, and China is less developed than Japan," he said. "The Asian culture just isn't accustomed to direct marketing. But Dell has been doing all the right things all along."
     Stephen Dube, a technology analyst at Wasserstein Perella Securities, said the move to expand its business in China was a logical progression for Dell.
     "Other companies who have expanded their business in Asia have had some problems, but they've got to make that investment," Dube said. "Over the longer period, it's still a rapidly growing market."
     In a separate statement, Dell Europe said its alliance with Wang Global will provide Dell's customers with better service after computer hardware had been delivered. The companies gave no financial details.
     "Customers require a vendor to provide a full range of services, adding value throughout the complete life cycle, to help them achieve the lowest possible total cost of ownership," said Jan Gesmar-Larsen, Dell Europe president.
     In 1997, Dell became the fourth-largest computer maker in Europe with a market share of 5.8 percent. Its sales jumped 55.2 percent to just over 1.1 million units.
     Shares of Dell (DELL) fell 5/16 to 67-3/16 in late-morning trading. Back to top
     -- from staff and wire reports


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