Report: Dell in Talks to Sell PC Factories

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Computer-maker Dell is attempting to off-load its computer manufacturing plants around the world, The Wall Street Journal reported in its Friday edition.

The company has approached contract manufacturers over the last few months offering to sell the plants, the newspaper reported quoting "people familiar with the matter."

Contract manufacturers are companies that specialize in making electronics products to-order and are a vital part of the world's electronics industry. A large percentage of the computer, networking and consumer electronics goods on sale from famous brand-names are made by such companies, many of which are based in Taiwan or China.

Dell said in March this year that it planned to take a look at its manufacturing operations as one part of a company-wide plan to enhance efficiency and achieve savings of US$3 billion over the next three years. At the time it announced plans to close a factory in Austin, Texas, "as a part of a broader assessment of its global manufacturing and logistics network."

Dell currently operates factories in Brazil, China, India, Ireland, Malaysia, Poland and the U.S.

A sale of its factories would represent a big shift in the way Dell does business.

The PC maker grew strong offering low-cost desktop PCs direct to consumers, built to customers' specifications after they were ordered. The process helped eliminate stockpiles of unsold computers and maximized use of inventory. However, in the last few years the market has shifted to laptop computers, which are trickier to customize because space is tighter.

Further pressure is being put on PC makers by the emergence of low-cost laptops, mainly from Taiwanese companies such as Asustek Computer and Micro-Star International. Several major brands have contracted manufacturing of their PCs to such companies in an effort to remain competitive in the market.

On Thursday Dell launched its own low-cost laptop. The Inspiron Mini 9 has an 8.9-inch screen and runs Windows XP Home or Ubuntu 8.04. Prices begin at US$349.

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