Dell Inc (DELL.O) is trying to sell computer
factories around the world in efforts to cut cost and improve
profitability, the Wall Street Journal said.
In recent months, Dell has approached contract computer
manufacturers with offers to sell the plants, the paper said,
citing people familiar with the matter.
One person briefed on the plan told the Journal that he
expects Dell to sell most, possibly all, of its factories
"within the next 18 months."
The most likely buyers of Dell's factories will be big
contract manufacturers, most of which are based in Asia, the
Dell's factories were originally tailored for a PC market
that was driven by corporate customers ordering large volumes
of desktop PCs.
But over the past three years, growth has shifted to
laptops sold to consumers at retail stores. Round Rock,
Texas-based Dell has lagged behind competitors in coming up
with a streamlined system to build portable PCs.
Dell could face several obstacles in selling its plants.
Contract manufacturers may be hesitant to buy factories in
places with high labor costs, like the United States, a person
with knowledge of the talks told the Journal.
And some facilities could be encumbered by agreements with
local governments. Dell's North Carolina plant, for example,
received several million dollars of state and local tax
incentives that are contingent on the factory meeting certain
employment and local-investment goals by 2015.
Though Dell's plants are still regarded as efficient at
churning out desktop PCs, within the industry, company-owned
factories aren't considered the least expensive way to produce
Contract manufacturers can generally produce computers for
less money because their entire operations are narrowly focused
on finding efficiencies in manufacturing, as opposed to large
firms like Dell, which must balance marketing and other
No one was available at Dell for immediate comment.
(Reporting by Sweta Singh in Bangalore; Editing by Sharon
Microsoft Corp (MSFT.O) kicked off a
$300 million marketing campaign on Thursday, aimed at improving
the image of its Windows Vista operating system and strike back
at Apple Inc's (AAPL.O) "Mac vs. PC" ads.
The first commercial of Microsoft's new marketing push,
being created by advertising agency Crispin Porter + Bogusky,
aired on Thursday featuring comedian Jerry Seinfeld and company
co-founder Bill Gates at a shoe store.
Despite selling more than 180 million licenses since its
launch in 2007, Windows Vista continues to suffer from the
perception that the operating system is clunky and hard to use
compared with Apple computers.
That image has been stoked by
featuring a geeky and unfashionable PC guy unable to keep up
with a better-looking, hip Mac counterpart.
"What the brand stands for, particularly in the case of
Windows Vista, has been defined by the competitors. The time is
now for us to get in and start telling our story," said Brad
Brooks, a corporate vice president at Microsoft.
Apple has steadily gained market share against PCs in
recent quarters. In the June quarter, Gartner said Apple
accounted for 8.5 percent of U.S. computer shipments, a rise of
38 percent from a year earlier. That outpaced the overall U.S.
computer market growth of 4.2 percent.
Microsoft said the commercial is part of a broader,
long-term initiative to change consumers' perception of
Windows, which will include setting up a retail corner at
several hundred Best Buy (BBY.N) and Circuit City (CC.N) stores
staffed by "Windows Gurus" to explain the benefits of Windows.
The company also said it has been working with PC makers to
optimize systems to speed up computer boot times and improve
the overall experience of using a Windows machine.
All the major PC brands are expected to introduce new or
revamped models, which Microsoft calls a new category of PCs,
with improved designs in the next few months.
(Reporting by Daisuke Wakabayashi; editing by Carol
U.S. private equity house Lone Star is
seriously considering suing the South Korean government if it
delays approval beyond September of the firm's $6.3 billion
sale of shares in a local bank, a newspaper reported on Friday.
English language daily The Korea Times said Lone Star was
mulling a suit claiming losses from the government for delaying
the sale of shares in Korea Exchange Bank (KEB) (004940.KS).
Lone Star's PR agency in Seoul declined to comment and a
lawyer representing Lone Star was not available for immediate
Last September, Lone Star (LS.UL) agreed to sell its 51
percent stake in KEB the country's No. 6 lender, to UK-based
HSBC (HSBA.L) (
But HSBC's offer lapsed on July 31, with the government
delaying approval of the KEB sale, citing legal uncertainties
relating to Lone Star's South Korean activities. The deal is
still awaiting regulatory approval.
"Beleaguered with growing complaints from investors, Lone
Star is considering returning its KEB shares in-kind to
investors as one possible option, together with a block sale
option," the Korea Times cited an unnamed source close to the
deal as saying.
"Investors have urged Lone Star to speed up the KEB sale,
and recently demanded the fund return its KEB shares or conduct
a block sale if the deal is delayed beyond September due to
legal problems," he said.
The source added that Lone Star had received approval from
the investors on the matter.
The newspaper also cited another source as saying that Lone
Star had set the end of September as the deadline for it to
The report comes after South Korean regulator, the
Financial Services Commission, said on Tuesday it may fine the
Dallas-based fund for failing to submit regulatory documents by
the Aug 31. deadline.
If fined, Lone Star would be disqualified from becoming a
top shareholder in any South Korean bank and therefore ordered
to immediately sell shares in the lender, which analysts said
could prompt HSBC to seek to lower its offer.
(Reporting by Kim Yeon-hee; Editing by Keiron Henderson)