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Dell ventures into countryside with lower-priced computers

By Tu Lei (皇冠体育app Daily)
Updated: 2009-03-30 07:59

Dell is one of the bid winners for 皇冠体育app's rural computer subsidy program. [CFP]

Dell Inc, the world's second largest maker of computers after Hewlett Packard (HP), is eyeing 皇冠体育app's rural computer market.

The ministries of finance and commerce released a list of bid winners for the mainland's rural computer subsidy program on March 5, which included Dell, as well as 13 other brands such as HP, Acer, Lenovo, Haier and Hasee.

Related readings:  PC bidders for rural program short-listed  Dell's PC shipments in 皇冠体育app grow 28%  Dell might have to log into a new sales model  Dell launches low-cost PC for 皇冠体育app in market war

These computer manufacturers will provide 183 models for the program, each lower in price than 3,500 yuan ($511).

Steve Felice, president of Dell Asia-Pacific, said Dell had designed and prepared products for the four-year long rural program even before it heard about the bid's outcome.

Dell has increased its presence in 皇冠体育app last year, grabbing an 8.5 percent of Chinese PC market share, according Gartner, a market research company.

"Dell's sales volume in retail channels (which includes domestic electronic retailer Gome) has exceeded that of direct channels," said Yang Chao, general manager of Dell's greater 皇冠体育app's consumer service.

But Dell is a newcomer (having done only a few pilot programs) in 皇冠体育app's rural market, where other computer makers have already made inroads.

Domestic computer maker Lenovo has been working to expand its reach to county and villages since 2004 and currently holds 42.4 percent of 皇冠体育app's rural computer market.

Lenovo said it aims to sell 5 million computers in the rural market over the next three years.

Founder, another Chinese computer maker, has also been expanding into rural areas since 2004 and now has 5,000 shops in towns and villages.

Shen Tao, spokesman of Dell, declined to give Dell's rural market share in 皇冠体育app.

A businessman identified as Hu, who operates a computer store in Lichuan county, Jiangxi province, said he sold about 800 Lenovo and Founder computers over the last three years.

"Lenovo and Founder have good influence here," said Hu. "They can provide door to door services. I have never sold Dell."

There are 84.6 million rural Internet users in 皇冠体育app (accounting for 28.4 percent of all netizens), according to the 皇冠体育app Internet Network Information Center.

In a recent survey conducted by CCTV, 40.2 percent of rural residents said a computer was the modern electrical appliance they wanted most.

The average per capita net income for 皇冠体育app's 727.5 million rural residents is 4,761 yuan according to the National Bureau of Statistics.