Dell's future rests on overseas sales

Growing demand from Asia and other emerging markets along with potential growth in the UK and Europe is reducing Dell's reliance on US sales, the company has said.

A senior executive at the company, the second biggest PC maker behind HP, stated that sales outside the US were growing much faster than its home market, with expectations that they would account for as much as two-thirds of total revenues within five years.

According to Steve Felice, president of Dell Asia-Pacific and Japan , revenue from international regions topped US revenue for the first time, with sales in Brazil, Russia, India and China generating 73 per cent growth in the first quarter.

At the rate things are going "two-thirds could come in five years," said Felice, referring to sales from outside the US.

The comments came after Dell posted higher-than-expected quarterly profit, driven by cost cuts and strong demand from consumers and foreign markets, especially for higher margin products such as its XPS line.

Dell pointed to the strong performance as evidence that a year-long turnaround led by founder Michael Dell, who returned to the chief executive post in January 2007, was yielding results.

However, Dell said US corporate customers were still cautious about buying given the uncertain economic outlook.

Dell has announced a plan to cut 8,900 jobs to reduce costs, but said Asia - with faster sales growth and a large part of the company's supply chain - would see more job growth.

"You will continue to see continued head-count growth in Asia," he said.

In March, the company said it would buy $23 billion (11.5 billion) of components from China this year and $29 billion (14.5 billion) in 2009, rising from $18 billion (9 billion) last year to help reduce costs.

(Additional reporting by IT PRO)