Dell sees China sales down

BEIJING (Reuters) - Dell Inc's (DELL.O) sales in China slowed last quarter, but Beijing's economic stimulus measures are likely to boost technology spending, the world's No. 2 personal computer maker said on Friday.

Revenue in China in the quarter ended October 31 was up 18 percent, lagging the previous quarter's 33 percent rise and well behind India's 48 percent growth.

Combined revenue for consumer and commercial products in Asia, including Japan, rose 11 percent for the quarter.

Steve Felice, president of Dell Asia-Pacific and Japan, said Dell had experienced a reduction in spending by small Chinese businesses that have been affected by the financial crisis, a market segment that he said would remain challenging. Felice was briefing reporters on a teleconference a day after the firm reported better-than-expected quarterly earnings as cost-saving measures started to take effect.

"China's clearly in a period of flux. We're seeing signals that are somewhat confusing," Felice said.

Much of the growth for the quarter came from the consumer side, while commercial products grew at a slower pace as smaller firms suffered from a cash crunch, he added.

The executive, however, was hopeful that the 4 trillion yuan ($586 billion) spending plan unveiled by Beijing on November 9 could give a lift to its sales in China.

"The recent stimulus package offered by the Chinese government suggests continued investment in infrastructure that usually means a requirement for increased technology spend," Felice said.

He said Dell would keep investing in research and development in Asia but would not expand manufacturing capacity in the region for now, Felice said.

Asia now accounts for 16 percent of Dell's total sales and is starting to have a "meaningful" impact on the company's overall results, Felice said.

"But it's still not enough to offset what's going on in the U.S.," he added.

(Reporting by Michael Wei; Editing by Alan Wheatley)