New Opportunities for Dell

Dell Inc. (DELL) is exploring new avenues for growth, and has recently turned its focus on the Indian market. The company already has 23,000 employees in India, and is in the process of increasing its headcount by another thousand over the next year or so.

The company is planning to tap the Indian market in a big way and will step up its operations to achieve total annual revenue of $2.0 billion from that country. Recently, the company launched two handsets based on the Google (GOOG) Android 2.1 platform in the Indian market. The high-end 3G enabled handsets, christened XCD 28 and XCD 35, are competetively priced.

Introduction of new products in PC and smartphone segments confirm Dell’s growing interest in the Indian market.

Moreover, the company has also introduced the third generation of micro servers, the PowerEdge C5000 line, including PowerEdge C5125 and C5220IT hosting. These new servers are expected to offer greater efficiencies to its datacenter customers.

The server introduction once again proves Dell’s interest in the cloud computing segment, as these new servers will allow applications to run on cloud computing infrastructures by individual dedicated physical servers without any impact on price, power or density. Cloud computing offers great opportunity for companies operating in the tech sector and Dell is all set to tap the prospects here.

The company is repositioning its Enterprise business to increase focus on several high-margin segments, such as cloud computing and network storage in which corporate spending is likely to increase. This should open up dditional business opportunities. Going forward, we expect this focus to positively impact the company’s results and thereby, investor sentiment.

Apart from Dell’s recent deal wins, growth prospects and acquisition spree we remain encouraged by its new products, a stronger services business, opportunities in the Electronic Medical Record sector, as well as the introduction of Dell Streak late last year. However, intense competition from Hewlett-Packard Company (HPQ) and Acer may temper growth prospects.

Currently, Dell has a short-term Strong Buy recommendation, as indicated by the Zacks #1 Rank.

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