Dell Struggles as Asia's PC Market Starts Growing Again

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The worst effects of the economic slowdown may be over for Asia's PC market, but Dell is struggling to keep up.

Second-quarter PC shipments in the Asia Pacific, excluding Japan, rose 8 percent over the same period last year, driven higher by stronger demand from consumers, IDC reported, citing preliminary estimates. The latest numbers end a two-quarter slump that saw shipments contract amid the tough economic environment.

On a consecutive basis, shipments rose 19 percent over the previous quarter, it said.

The increase in overall PC shipments during the second-quarter was good news for top PC vendors, with one noticeable exception: Dell's PC shipments remained flat, growing just 0.3 percent compared to the second quarter of 2008.

Corporate sales are a major component of Dell's business in Asia, and demand for PCs from Asian businesses remains weak. "Weak corporate sales are part of what's hurting them," said Bryan Ma, director of personal systems research at IDC Asia-Pacific, noting that the PC maker is in the midst of a reorganization that aims to improve its competitiveness.

While Dell is unlikely to see a sharp increase in Asian PC shipments before a recovery in demand for PCs from business, the company is trying to appeal more to consumers and has seen some success in this regard. "Dell's consumer team has made progress," Ma said.

However, the consumer team's progress wasn't enough to keep pace with rivals. Dell's biggest competitors, which all have a stronger presence in the consumer PC market, saw healthy increases in the number of units they shipped during the second quarter.

IDC's preliminary data showed top-ranked Lenovo's shipments rose 7.3 percent, while HP, which is the second-largest PC vendor in Asia, saw an increase of 25.1 percent. Dell managed to hold onto its spot as the third-largest PC maker, but Acer and China's Founder Group closed the gap, with unit growth of 12 percent and 12.3 percent, respectively.

The jump in Acer's shipments bring the Taiwanese PC vendor closer to overtaking Dell as Asia's third-largest PC maker.

"They are definitely within striking distance," Ma said.

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