Dell Dumping China, Moving Likely to India

Discussion in 'China' started by tarunraju, Mar 25, 2010.

  1. tarunraju

    tarunraju Moderator Moderator

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    Score 2 for big IT companies abandoning ship on China (where intellectual property is as safe as unprotected ---). Dell wants to move out of China (for sure), into India (probably):

    Source
     
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  3. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    So begins the exodus of US companies bailing on China. =================================

    GoDaddy.com and Dell Set To Join Google.com In Leaving China

    Thursday, March 25, 2010, 5:30:22 AM

    American companies GoDaddy and Dell (DELL) are set to leave China due to stricter regulations and discouraging environment to enterprises. The Chinese government has introduced new regulations that require full photo identification to purchase a website name in the country.

    Due to the stricter conditions set out by China, GoDaddy, the world’s largest domain-name registrar, announced that they would not be offering new “.cn” domain registrations. The new Chinese policies required every website owner to submit photographs, business information and individually signed forms, as well as their physical address, email address and telephone numbers.

    Separately, one of the world’s largest PC makers, Dell, said that it could switch its operations from China over to India. Dell stated that they were looking for a climate conducive to enterprise, potentially taking the $US25 billion it spends on equipment and parts in China to India.

    GoDaddy and Dell's decision to move from China comes only days after Google (GOOG) announced that they would be leaving China and shifting its search services from the mainland to an unfiltered Hong-Kong site, but the move has been criticized by the Chinese Government.

    http://www.domainsdir.com/news/ShowItem.aspx?ID=37712
     
  4. 1.44

    1.44 Member of The Month SEPTEMBER 2009 Senior Member

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    Dell Denies Discussing China Move With India Minister


    March 25 -- Dell Inc. denied an Indian government release that Chief Executive Officer Michael Dell discussed shifting procurement from China to a “safer environment” with Indian Prime Minister Manmohan Singh.
    “There was no discussion concerning any change in how or from where Dell will source component parts for the computers it manufactures in Asia,” Minari Shah, a Dell spokeswoman, said in a e-mailed statement today.

    Dell sources “equipment and parts worth $25 billion from China,” Singh told members of India’s Planning Commission on March 23, according to an e-mailed text of his speech released by India’s Press Information Bureau that evening.
    “They would like to shift to safer environment with climate conducive to enterprise with security of legal system,” Singh told the plan panel. “So I think this is an area where there are immense opportunities,” he said in the speech.
    The Web site for the Press Information Bureau, where releases of Singh’s official speeches are posted, no longer has a copy of the remarks. The text was removed after officials from the Round Rock, Texas-based company contacted the Indian press office, Dell’s Shah said.
    Harish Khare, a media adviser to Singh, declined to comment.
    Holding the Hammer
    Dell should avoid damaging relations with the Chinese government because it’s such a large market, said Tom Wirth, senior investment officer at Chemung Canal Trust Co., which manages $1.6 billion in Elmira, New York, and doesn’t own any shares of Dell.
    “For Dell as a company, certainly that hurts,” he said. “The fact is China holds the hammer to us -- we are indebted to China and not the other way around at this point.”
    China accounted for more than 60 percent of all personal computers shipped in the Asia-Pacific region last quarter, according to Gartner Inc. Shipments in that area climbed 44 percent, the fastest rate among the regions surveyed, according to the Stamford, Connecticut-based researcher.
    Michael Dell met Singh the day after Google Inc. started routing China-based users to an unfiltered search service on its Hong Kong site, following through on a Jan. 12 statement to end self-censorship of its Google.cn portal. Dell declined to comment March 23 when asked about Google’s decision.
    Dell rose 3 cents to $15.02 at 10:11 a.m. New York time in Nasdaq Stock Market trading. The shares had climbed 4.4 percent this year before today.


    http://www.businessweek.com/news/20...g-china-shift-with-indian-prime-minister.html
     
  5. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    ^^ Yeah yeah... Dell is still leaving which is the important point.
     
  6. tarunraju

    tarunraju Moderator Moderator

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    That's usual rhetoric. Dell just wants a safe passage out of China. So it will deny what anyone else has to say about it, till one fine day it says tata to China. Exactly what Google did. I hope countries like India, South Africa, and Brazil benefit from this pre-bubble burst bloodbath.
     
  7. badguy2000

    badguy2000 Respected Member Senior Member

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    Dell's sale 2010 in china will be 5 billion USD .Besides, its contract with Chinese supplies is worth 25 billion USD in 2010.

    If you were the boss of Del and were not stupid,Dare you "dump" CHina?

    think about it BadGuy, No abusive word against any member is tolerated here , keep it in your mind while posting next time

     
    Last edited by a moderator: Mar 26, 2010
  8. amoy

    amoy Senior Member Senior Member

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    Dell, frankly has lost its marketing edge in China. It has a DC in my city... yet its market share is shrinking all the time, vs. Lenovo, HP
    Sounds puzzling to me. Dell in my mind is but a PC assembler and seller... not something of an innovator any longer.

    Goddady.com? never heard of ya.

    That's a totally commercial call. If India is a better market or sourcing, Dell shall certainly move there.
     
  9. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Dell sales in China grew by 81% in Feb. They can see the writing on the wall that China will no longer be the Asian Tiger in the near future because growth is overinflated. Just as Google and Godaddy have done, Dell is making the move to save their ass from the coming implosion. Moving their $25 billion operation outside of the country is going to be a severe blow to the Sino IT industry.
     
    Last edited by a moderator: Mar 26, 2010
  10. badguy2000

    badguy2000 Respected Member Senior Member

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    well, Dell is a nothing but a plain assembler.

    a only $25 billion operation can be "a serere blow" to CHina IT industry? have you taken drugs,guy?

    Instead, without CHina, I really don't where on earth can Dell get its supplies,let alone its billion dollar sales in CHina.

    If Dell really wanted to quit PC sales and close its door, to quit China would be a good choice.
     
  11. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Dell doesn't have to quit selling in China unless CCP bans it. That would bring all kinds of trade disputes if China went that route. Dell buys the components in China that lets you have a thriving IT industry with their contribution of $25 billion per year. That is no small number to any country, much less a poor country like China. The move is going to put hundreds of thousands of Chinese labourers and engineers out of work. Dell can outsource to India, Malayasia of wherever and prepare themselves for the pop of Chinese bubbles.
     
  12. amoy

    amoy Senior Member Senior Member

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    If Dell has to pack and go, fine.

    For Dell it's good to operate in India or anywhere if it makes commercial sense.

    For Chinese consumers, no hurt! Other brands will quickly fill the vacuum if there's any left by Dell. Anyway it's nothing more than a PC assembler - outsourcing parts then assembling on order then distributing - hardly any value-added or innovative nowadays.

    Personally I'm using HP laptop, and in office we have Lenovo...
    Dell will be safe with or without China... It even hardly stirs a storm in the teapot. Who needs whom more? But this case may shed some light on the dilemma of some foreign enterprises, in and beyond China. They may have been bottlenecked for growth after so many years of good old time. When each household in my city owns 1-2 PCs and competition gets fierce they can't enjoy themselves by playing old tricks any longer.
     
    Last edited: Mar 26, 2010
  13. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    You miss the point. Dell buys parts made in China by companies like Nvidia, ATI, Gigibyte, Intel that have operations in China. If they stop buying parts there, those companies are going to take a hit and leave too to get on Dell's action. HP has been getting serious flak from the CCP and will likely pack up in the near future just as Dell. The only player left will be Lenovo but their won't be enough suppliers left in the country once these other ship out. It will be a cascade effect which will kill the Sino IT.
     
  14. amoy

    amoy Senior Member Senior Member

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    u kidding? is Dell the sole customer of all these companies? so long as consumers need PC, PC makers will certainly buy from these Nvidia, filling the shortfall left by Dell if any.
    I don't think Dell is relevant to IT, but a PC brand like other consumer goods brands Avon or P&G. They need to compete for their own survival. Don't imagine consumers will kneel down to beg them to stay. The invisible hand of market will work for us for equilibrium. In a market economy never think of itself as something indispensible or superior. One quits, many arise. Consumers won't give a damn to it be it foreign or homegrown.
     
    Last edited: Mar 26, 2010
  15. tarunraju

    tarunraju Moderator Moderator

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    Supplies? Intel processors in the Asia-Pacific region come from Malaysia. AMD processors come from Germany, Malaysia, motherboards (Intel OEM) come from Malaysia, motherboards (Foxconn OEM) come from Taiwan, other components such are made in Singapore, Taiwan and South Korea anyway, most other components can be made locally with raw materials available. On the supplies front there's close to nothing Dell loses by moving out of China.
     
    Last edited: Mar 26, 2010
  16. Yusuf

    Yusuf GUARDIAN Administrator

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    I don't know what to term the response from the chinese members to a potential pull out of dell and others and its impact on china. Call it arrogance, ignorance?

    Chinas massive industrial set up was to cater to the western clients. If they all want to punish china for whatever reasons, they can. Right now they are going to china, they may well move to other country. India isn't too far behind cheap labor is concerned. Many US companies have already set up research work here already.

    China will be left with excess capacity and big problem of unemployment. To tell you from personal experience, there was not a long time ago when an indian importer would be last on the priority of a chinese manufacturer. They all wanted the western customers first and entertained them first. Now there is a change. They now welcome indians like never before. Every other day I received fax and email from some factory or the other in china wanting to do business with us.

    China will only display foolish arrogance if it actually thinks like some of the members here
     
  17. badguy2000

    badguy2000 Respected Member Senior Member

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    If dell were to move out of CHina, the decision would make CEO of Dell lose his job first..clap


    do you really think 25 billion Dollar would be a big deal to China? pls check the data of CHina's export and import first.

    if delll were to cut off its trade tie with CHina, its share price would make a dive...CHIna now is Dell's global second biggest market,only behind USA.

    in a word, Dell is not in the position where it can bargain with Chinese government.
     
  18. badguy2000

    badguy2000 Respected Member Senior Member

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    pls check you PC first,then tell me where the components inside it are made....ok?
     
  19. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    BG,

    You are mixing up things aren’t you?

    Who says dell will in one go leave the PRC as was done by google, it’s a slow process and if true then rest assured they will be out quietly with in a year’s time or so, the motive of our PM to have this go public was simple and that was to set the cat amongst the pigeons, lets see the impact, it will be out in the next few days.

    They will not loose out on the billion dollar sales which is growing each years as the figures show for the mainland china. The manufacturing, sourcing and supplying markets will be changed and they will export their product line to the PRC from that host country so the sales will happen and will keep growing, mind you a brand like dell doesnot sell as much on the cost factor but more on the brand image it carries and the customization they bring about to their products for that extra price.

    Sourcing of business to the tune of 25b usd is minuscule as per industry standards of the PRC and that wont be the impact, the real impact will be when more and more companies follow the suite and take public stands on either the PRC bow down to them or they are out of it and if the PRC then will not be ready to listen to them then my friend rest assured you will have a chain reaction as we call in hindi – “bher chal”, and that is when the panic will set in and the real impact felt. New for you since you guys are not exposed to such things in a country where state controls everything but mind you people and companies coming from free world think much freely and hate being controlled endlessly by the state, and have the balls of taking on the system even if it means taking on the PRC and rest assured if it is a mass call in the end your very own government will go down on its keens and listen and do all that these companies want and hell you will request google to come back.

    As for godaddy, ohimalaya they host domain names and “.cn” is hosted by them which is huge. Think of it, what would you like your site as .com or .cn?
     
    nitesh and tharikiran like this.
  20. tharikiran

    tharikiran Regular Member

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    It would be interesting to see if this trend gains momentum.We have been discussing in the forum for ages about China's lack of respect to intellectual and propreitery rights.Seems like companies are feeling the sting now.It would be nice, if we can dig deeper into the real problems the companies are facing in China.
    China should realise that they can't control everything all the time.
    Our Chinese brothers are saying that these foreign companies are not able to face the competetion and local companies will fill the void.
    But, without competition where will the innovation,growth,lower prices e.tc.come from ?

    Is this a kind of paradigm shift ? We have to wait and see.
     
    Last edited: Mar 26, 2010
  21. badguy2000

    badguy2000 Respected Member Senior Member

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    well, guy, because west countries almost bankrupted last year, didn't west decreade their orders to CHina 40% in 2009??

    but why CHinese economy still grew 8.7% in spite of such 40% cut of orders from West countries?

    can you explain it?

    guy, face the world 2010 pls. tell me which ass on earth is saved by others,China's or west's?
     

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