Dell Q2 revenue up in Japan, China, India

TOKYO/HONG KONG - Dell Inc., the world’s top PC maker, racked up solid quarterly revenue growth in Asia and Chairman Michael Dell reaffirmed on Friday that a US regulatory probe into its books would not affect its bottom line.

By (Reuters)

Published: Fri 18 Aug 2006, 6:08 PM

Last updated: Sat 4 Apr 2015, 2:18 PM

The company said on Thursday that the U.S. Securities and Exchange Commission was conducting an informal inquiry into how the PC giant, now grappling with stiff competition from Hewlett Packard Co., books revenue and other matters.

Dell, in Hong Kong as part of an Asian business tour, reiterated that he expected no “material impact” from a recall of 4.1 million notebook computer batteries supplied by Sony Corp. -- the biggest electronics recall in U.S. history.

The U.S. firm would keep buying Sony’s batteries, he said, reassuring a Japanese electronics giant now trying to revamp its electronics business and fend off rivals Samsung Electronics Co. Ltd. and Sharp Corp..

“Based on everything we have known, we don’t expect there will be any material difference in our financials” from the SEC investigation, the 41-year-old Dell told reporters in the city.

“We have worked extensively with Sony to make sure they have made the right changes in the process,” he added. “Based on improvements they have made and measures they have taken, they will continue to be one of the battery suppliers.”

Dell is having a turbulent week: apart from battling a potential public-relations nightmare after the Sony recall, the departure of top executives in China and the SEC investigation, it also posted on Thursday a fiscal second-quarter profit plunge of 51 percent after cutting prices to gain market share.

No crystal ball

The company’s revenue grew just 2 percent in Japan, a key market. But sales jumped 31 percent in China and 63 percent in India.

Dell’s chairman declined to provide any outlook for the current quarter.

“I think we (Dell as a whole) got a little too aggressive in pricing strategy. But in Asia we did see good elasticity,” Dell’s regional head Steve Felice told reporters in a conference call. “In Asia, we saw very solid profitability.”

Asia, which accounts for 14 percent of Dell’s revenue, has been a bright spot for the company.

“We will continue to provide competitive pricing,” Felice said when asked if Dell would lower prices in Asia still further for market share.

Felice said the company’s plan to launch Dimension consumer desktop PCs with Advanced Micro Devices Inc. microprocessors could have a “profound impact” on growth in China.

“Customers asked us to expand the product line to include AMD, and the Dimension line has a lot of appeal in China. We’ve had good growth in China so far and this will help us accelerate that,” he said.

In Japan, Dell sold 14.5 percent more PCs in the April-June quarter than a year earlier on aggressive pricing, nudging out Fujitsu Ltd. to become the second-largest PC supplier in Japan after NEC Corp. in the quarter, according to research firm IDC.

Dell’s unit shipments in India surged 82 percent in the quarter, giving it a market share of about 7 percent. Growth in India is “phenomenal,” Felice said, saying he expected high double-digit percentage growth for India in both revenue and unit terms.

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