Dell sees Asia business sound but voices caution

Shoppers walk past a Dell booth at the COMEX information technology and consumers technology exhibition in Singapore, August 28, 2008.

BEIJING (Reuters) - Dell Inc, the world's No. 2 personal computer maker, said on Friday its Asia Pacific business was holding up even as corporations turned cautious about spending on technology because of slowing global growth.

Dell managed to maintain sound margins and balanced profitability in the region with total revenue growing by 25 percent in the latest quarter from a year earlier, said Steve Felice, president of Dell Asia-Pacific and Japan.

Felice was briefing reporters on a teleconference a day after the firm reported a surprisingly steep drop in quarterly earnings as companies around the world cut back on technology spending in response to a global economic slowdown.

"I haven't changed my level of optimism around our business and demand levels and our ability to grow," he said.

Overall economic growth in most countries in the region is still healthy and companies still view information technology as an important productivity tool, Felice said.

"The industry is still projecting double-digit growth. I still want to grow faster than the industry," Felice said.

Revenues in the quarter grew 33 percent in China, 59 percent in India and by 30 percent on average in the members of the Association of South East Asian Nations.

Felice expressed concern that high inflation in Asia could trigger interest rate rises that would then crimp spending, but he said the outlook for growth in the region remained "extremely healthy.'

"I am more on a watch mode than drawing any conclusions at this point of time," Felice said.

(Reporting by Michael Wei; Editing by Alan Wheatley and Jonathan Hopfner)