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TheStreet Open House

Dell Tries to Keep Its Grip on China

Stocks in this article: DELLAAPLGOOGBIDUHPQTCTZFMSFT

SINGAPORE ( TheStreet) -- In June, Dell (DELL) said it would open a directory's worth of new stores in China, targeting out-of-the-way but not too badly off cities in the hinterland as well as the obvious coastal markets.

PC isn't a swearword in China yet, but another asset to business. Dell says it's the No. 1 seller of X86 servers in China, where data centers are growing too fast for in-house management.

Last week a sales official with the Texas-based PC giant -- which has 11.54% world market share, according to Gartner -- said that by year's end it would start selling a new tablet only in China, probably at the cheap end minus some of the perks (speed?) that would add cost.

The firm also saw net income fall 72% in the second quarter and faces a split between a group including founder Michael Dell and Silver Lake Partners and one involving some company shareholders over whether to take the firm private. The shareholder meeting is scheduled for Thursday.

But those woes might as well be in a different orbit as Dell tries to make itself as relevant in China as diced chicken over rice. That's what they all say, given China's market size, but this particular multinational shows signs of doing it.

Dell calls China its second most important market overall after the United States, despite a cut in IT spending due to China's economic slowdown. Market research firm Gartner ranks Dell No. 2 for desktops and mobile PCs in China. Its latest China market share of 7.86% isn't the highest ever but appears under control.

Like most tech hardware vendors, Dell withholds figures on sales or even the number of stores in China. It won't say whether China business is growing. But at least Dell acknowledges a battle with Apple (AAPL), Hewlett-Packard (HPQ) and the homegrown Lenovo.

On the tablet front, the iPad -- still a status symbol in China -- has lost market share in the country, slipping to 28% in the second quarter according to American tech research firm IDC. The dropoff leaves a void for other tablet vendors, especially those that rely on Google's (GOOG) Android, an open mobile operating system that's obviously cheaper than iOS.

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