LONDON — With its stock price falling to levels not seen in more than a decade, it may seem an odd time for Dell Inc. to start talking about giving away money.
But the Round Rock, Texas-based company has its sights set on the next generation of potential customers, most of whom are in China, India, and other emerging markets.
Towards that end, Dell announced recently the launch of a global philanthropic strategy designed to help make young people in those markets more computer-savvy.
The company plans to increase overall corporate giving to 1 percent of its pretax profits by the beginning of its fiscal 2011, which begins in February 2010. Groups in emerging countries will be able to apply for grants for projects that promote the development of technology skills in youths up to age 17.
During this fiscal year, the company said, it would expand giving to India, asking organizations there to apply for one-year grants of up to $500,000 per project.
"Until now, our giving has been very fragmented, with different projects going on in various places," said Pim Dale, Dell's vice president and managing director of emerging countries.
Dell chairman and CEO Michael Dell, speaking at a conference here on the IT development of emerging countries, said the company sees great potential for growth in both China and India, markets where Dell is seeking to move beyond its pioneering direct-sales model.
But the world's No. 2 personal computer maker, which saw its share price fall below $16 this month for the first time since 1998, has been forced to reshape that model in today's most promising PC markets.
Dell said there are 500,000 new Internet users a day in emerging markets. So, he said, the company has opened retail stores in India where salespeople will walk consumers through the process of buying a computer over the Internet.
Indeed, after years of shying away from retailers, Dell now sells computers in more than 15,000 stores around the world. At the same time, the company works with 40,000 partners who resell Dell products to commercial customers.
"This is allowing us to reach second- and third-tier cities in China," Dell said.
Again and again, Dell highlighted the company's burgeoning relationship with China and India during his keynote address to the Economist Emerging Markets Summit.
"We'll spend $70 billion in China in three years, making us one of the biggest customers of China Inc.," he said.
When asked what he wished he'd done differently in emerging markets, Dell said he wished he had developed a stronger cadre of local managers inside each country 10 years ago.
"We'd love to have more skilled managers from these countries who really understand the culture," he said.
Another challenge for Dell: personalizing the brand.
"We're known in these countries as the computer one has if they are working in a big company," Dell said.
Analysts agreed that Dell is right to focus increasingly on China and India.
"Dell is judicious in its application of funds to promote digital culture among young people in these countries," said Roger Kay, president of Endpoint Technologies Associates Inc. in Massachusetts. "Other high-growth opportunities include Russia and Brazil, which are not quite as large but are both emerging as new, increasingly wealthy markets."
In total, the Asia-Pacific region — excluding Japan — along with other emerging areas such as
Latin America, Eastern Europe, Africa and the Middle East, will account for about 59 percent of global personal computer volume by 2012, up from 48 percent in 2007, according to IDC, which tracks technology sales and trends.
When asked about other markets, Dell said that Russia was a great market but a challenging one.
"It has a tariff system that is pretty onerous for our types of products," he said. "It also doesn't have the same population size as China or India."
Dale said that besides China and India, Brazil, Russia, and the Middle East all are important markets. In Africa, too, the company has witnessed an explosion in growth in the last quarter in Angola and Nigeria.
"By the end of the calendar year, we'll have the same infrastructure of support services in places around the world — from Nigeria to small cities in Russia — as we do in London and New York," he said. "This represents a massive investment on Dell's part."
Shelley Emling's e-mail address is semling@coxnews.com