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Dell criticises IBM-Lenovo deal

PC maker says mergers and acquisitions aren't the way to succeed

IBM executives looking for a buyer for their company's PC business most likely did not spend time in Round Rock, Texas. Speaking at a press conference, Dell founder and CEO Michael Dell said that his company's US facilities give them an edge against other North American vendors.

IBM on Wednesday announced a deal to sell its PC business unit, or parts of it, to China's Lenovo Group. Dell addressed the issue on Tuesday before the deal was officially announced, in response to questions about the expected sale.

"We have not really grown our company by acquisition," he said at the San Francisco event. "We like to acquire competitors one customer at a time."

In an industry largely seen to be in the midst of consolidation, Dell has avoided making acquisitions, largely because the company's founder views his way as a "healthier and more sustainable" way to grow. "When was the last time you saw a successful merger or acquisition in the computer industry? It hasn't happened, at least not in a long, long time," Dell said.

Though Dell posted record numbers during its most recent financial results, the company's two largest competitors – Hewlett-Packard and IBM – have struggled to turn a profit selling personal computers.

Dell attributed his competitors' problems to outsourcing.

"It's been a long time since our leading competitors actually made a computer," he said. "They have outsourced manufacturing computers a long time ago, but Dell continues to invest heavily in the manufacturing and design of computers."

Moving facilities offshore may have seemed appealing during the industry-wide sales slump of the last few years, but it has left some companies at a disadvantage as demand picks up again, Dell said.

Dell has some first-hand experience in the problems that can accompany offshoring. A year ago the company moved customer support operations for its Optiplex desktops and Latitude notebooks back to the US after corporate customers complained about the quality of service they were receiving from international facilities.

Dell, however, does have a number of manufacturing facilities located outside the US, including factories in Ireland, Malaysia, China, and Brazil.


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