Dell to use cash flows to make acquisitions: CEO

BANGALORE Mon Jan 9, 2012 10:08pm IST

Dell Inc Chairman and CEO Michael Dell is seen during the Web 2.0 Summit in San Francisco, California October 18, 2011. REUTERS/Robert Galbraith/Files

Dell Inc Chairman and CEO Michael Dell is seen during the Web 2.0 Summit in San Francisco, California October 18, 2011.

Credit: Reuters/Robert Galbraith/Files

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BANGALORE (Reuters) - Dell Inc DELL.O, the world's number three personal computer maker, will use its "strong cash flows" to make acquisitions to boost growth, Chief Executive Michael Dell said on Monday.

Dell could acquire small and medium size companies that would give it access to new technologies, he said at a business event in southern Indian city of Bangalore.

Dell, which has long-depended on government, corporate and consumer technology spending worldwide, has been diversifying from hardware into higher-margin services, but at a slower pace than some rivals.

"You will see us be a serial acquirer using our strong cash flows to enhance our growth and add to our development capability," Dell said.

He said that the smartphones and tablets were unlikely to dent demand for personal computers.

"If you look at the tablet, it's a very interesting and exciting device. It's basically an additional device," Dell said.

"In other words, if I get a tablet I don't get rid of my smartphone. If I get a smartphone, I don't get rid of the PC either."

In November, Dell reported quarterly revenue that missed Wall Street estimates, and the computer maker warned that full-year revenue could be hurt by an industry-wide shortage of hard drives.

The company lost market share during the third quarter to Asian rival Lenovo Group (0992.HK) which vaulted past it to claim the No. 2 ranking in PCs behind market leader Hewlett-Packard (HPQ.N).

(Reporting by Harichandan Arakali; Writing by Sumeet Chatterjee; Editing by Jane Merriman)

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