<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Dell to sell computer factories worldwide
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->HONG KONG: Dell is seeking to sell all of its manufacturing plants worldwide and has approached contract computer manufacturers, the Wall Street Journal reported yesterday, citing people familiar with the matter.
The proposed factory sales, intended to slash costs, mark a significant shift from Dell's long-standing strategy of making its own products, the Journal said. Instead, Dell plans to have contract manufacturers make all its computers, the paper reported.
Dell, the world's second-biggest maker of personal computers, is seeking to boost profits after reporting last week that second-quarter earnings fell 17 per cent to US$616 million (S$871 million), missing analysts' estimates, after price cuts aimed at taking market share from industry leader Hewlett-Packard.
Selling its production sites to focus on sales and marketing may aid efforts by Dell to expand its product range.
'As the company moves away from its direct sales business model, it needs to offer a wider range of products and respond more quickly to market demand,' said technology analyst Wang Wanli of HSBC Holdings in Taipei. 'Outsourcing production to third-party manufacturers will help them become more flexible.'
Dell would ensure that any contract manufacturer who purchased a factory would agree to make hardware for the company, according to the Journal. Dell may sell all of its plants within 18 months, the newspaper said.
Last month, Dell introduced new notebooks with longer battery life aimed at business users. The company also started selling a slimmer laptop weighing 1kg after HP offered a similar model in June.
Dell, which last year abandoned selling PCs only via telephone and the Internet, has forged agreements to sell its computers through retailers like Wal-Mart in the US, Gome Electrical Appliance Holdings in China, Carrefour in Europe, Bic Camera in Japan, and the Croma chain of electronics stores of India's Tata group.
Singapore-based Dell spokesman T. R. Reid for Asia Pacific and Japan declined to comment on the report. 'We have said repeatedly there are opportunities to use third-party manufacturers to reduce costs and increase efficiency,' said the spokesman. 'Determining how best to do that is something that is in process now.'
Dell increased PC shipments 21 per cent in the quarter ended June 30, compared with Hewlett-Packard's 17 per cent, and 15 per cent for the market overall, according to research company IDC. Dell cut prices by an average of 7 per cent in the three months ended Aug 1, it said on Thursday.
Taiwanese suppliers including Hon Hai Precision Industry, Compal Electronics and Quanta Computer will benefit from higher orders if Dell sells its own production facilities, HSBC's Mr Wang said. Hon Hai has not held any discussions with Dell to buy the company's facilities, its spokesman said yesterday. BLOOMBERG
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->HONG KONG: Dell is seeking to sell all of its manufacturing plants worldwide and has approached contract computer manufacturers, the Wall Street Journal reported yesterday, citing people familiar with the matter.
The proposed factory sales, intended to slash costs, mark a significant shift from Dell's long-standing strategy of making its own products, the Journal said. Instead, Dell plans to have contract manufacturers make all its computers, the paper reported.
Dell, the world's second-biggest maker of personal computers, is seeking to boost profits after reporting last week that second-quarter earnings fell 17 per cent to US$616 million (S$871 million), missing analysts' estimates, after price cuts aimed at taking market share from industry leader Hewlett-Packard.
Selling its production sites to focus on sales and marketing may aid efforts by Dell to expand its product range.
'As the company moves away from its direct sales business model, it needs to offer a wider range of products and respond more quickly to market demand,' said technology analyst Wang Wanli of HSBC Holdings in Taipei. 'Outsourcing production to third-party manufacturers will help them become more flexible.'
Dell would ensure that any contract manufacturer who purchased a factory would agree to make hardware for the company, according to the Journal. Dell may sell all of its plants within 18 months, the newspaper said.
Last month, Dell introduced new notebooks with longer battery life aimed at business users. The company also started selling a slimmer laptop weighing 1kg after HP offered a similar model in June.
Dell, which last year abandoned selling PCs only via telephone and the Internet, has forged agreements to sell its computers through retailers like Wal-Mart in the US, Gome Electrical Appliance Holdings in China, Carrefour in Europe, Bic Camera in Japan, and the Croma chain of electronics stores of India's Tata group.
Singapore-based Dell spokesman T. R. Reid for Asia Pacific and Japan declined to comment on the report. 'We have said repeatedly there are opportunities to use third-party manufacturers to reduce costs and increase efficiency,' said the spokesman. 'Determining how best to do that is something that is in process now.'
Dell increased PC shipments 21 per cent in the quarter ended June 30, compared with Hewlett-Packard's 17 per cent, and 15 per cent for the market overall, according to research company IDC. Dell cut prices by an average of 7 per cent in the three months ended Aug 1, it said on Thursday.
Taiwanese suppliers including Hon Hai Precision Industry, Compal Electronics and Quanta Computer will benefit from higher orders if Dell sells its own production facilities, HSBC's Mr Wang said. Hon Hai has not held any discussions with Dell to buy the company's facilities, its spokesman said yesterday. BLOOMBERG
