Shanghai, Dell mull $300 computer

By Staff and reports

HONG KONG, China (CNN) -- The city of Shanghai plans to cooperate with Dell Computer to develop $300 personal computers in China, according to Xinhua.

Shanghai mayor Xu Kuangdi wants to work with Dell to make PCs for the education sector, especially for undeveloped western China. Cheap computers would be particularly welcome there.

China's technology market is set to soar, with compound annual growth rate of 25 percent between 2001 and 2003, according to research group IDC.

That's double the growth rate in the United States and western Europe.

Growing demand

Mayor Xu raised the idea of pairing up in a meeting with Dell, the world's number-one personal computer maker, state news agency Xinhua reported.

Broaching the idea with Dell president and chief operating officer Kevin Rollins, Xu said that almost every family in Shanghai wants to teach their children technology skills.

There are approximately 10 computers for every 100 families and one PC for every 43 students at schools in Shanghai, Xinhua said.

Dell has a 390,000 square foot factory in China that began production in November.

The PC maker has experienced strong growth in the mainland, with a 60 percent year-on-year rise in units sold reported in its fiscal first quarter results.

On Thursday, Dell announced a net loss for the second quarter of $101 million, compared with a net profit of $603 million the same time a year ago.

Excluding a $742 million charge for job losses, it earned $433 million, 16 cents a share. That was in line with estimates. But it warned on earnings and sales for the third quarter.

The PC maker said it managed to continue to gain market share in an overall weak tech market.