March 26 (Bloomberg) -- Dell Inc., the world’s second- largest maker of personal computers, will sell PCs to China’s farmers, seeking to boost sales from a potential market of 800 million rural residents as the global recession saps demand.

Dell has 15 computer products it will sell to rural consumers in China, a market that makes up 5 percent of the company’s global business, the PC maker’s Greater China President Amit Midha said at a briefing in Beijing today.

The Round Rock, Texas-based company aims to tap China’s plan to hand out 20 billion yuan ($2.9 billion) of subsidies this year for farmers to buy home appliances as the government seeks to drive up consumption to revive the world’s third- biggest economy. Dell last month reported fourth-quarter sales fell 16 percent to $13.4 billion, missing analysts’ estimates.

“China is likely to emerge faster than any other country and grow stronger,” Dell Chief Executive Officer Michael Dell said at the briefing. “The Chinese government’s stimulus plan will have a positive impact on boosting demand.”

Dell said global demand for computers has stabilized, three weeks after market leader Hewlett-Packard Co. said technology demand won’t improve for the rest of the year.

Global PC shipments will drop 12 percent this year, the most ever, as customers hold off purchases during the recession, researcher Gartner Inc. said March 3. Until now, the worst drop was in 2001, when shipments fell 3.2 percent.

‘Demand Steady’

“Week-on-week, the demand for PC sales has been steady,” Dell said today. Dell expects to see “encouraging” demand from the public sector in the U.S., he said, without elaborating.

The company bought $23 billion of equipment and supplies from China last year, Dell said. Sales in the nation, the computer maker’s second-largest market by revenue, rose 28 percent in the fiscal year ended Jan. 31, four times the industry average, he said.

Dell, also the third-largest maker of server computers, sees servers as a “key” business, the chief executive said. The company yesterday introduced a line of more efficient models in a bid to lure businesses away from International Business Machines Corp. and Hewlett-Packard.

IBM is in talks to buy Sun Microsystems Inc., the fourth- largest maker of servers, according to people familiar with the negotiations. The takeover speculation creates an “enormous opportunity” for Dell to take away customers from Sun, Dell said in Tokyo on March 24.

Cautious With Acquisitions

Dell will be cautious in considering any acquisition, the CEO said today.

“Just because you have $10 billion, doesn’t mean you have to spend it,” said Dell. “We’ll be pretty careful in finding the right things that really fit our business.”

Dell will continue to look at its main business areas including data center, services, software, server and storage assets for future acquisitions, he said.

Non-PC businesses, including servers, services and storage, account for half of the company’s profit, Dell said.

Dell advanced 18 cents, or 1.7 percent, to $10.35 at 4:30 p.m. New York time in Nasdaq Stock Market trading. The stock has gained 1.1 percent this year.

The company, which has expanded its products since hiring Ron Garriques, the former head of Motorola Inc.’s mobile-phone unit, to run its consumer business in 2007, said in September it may eventually sell smaller devices with features similar to smart phones.

Dell isn’t yet ready to announce any “smaller-screen” product, the CEO said.

To contact the reporter on this story: Li Yanping in Beijing at yli16@bloomberg.net

Last Updated: March 26, 2009 16:33 EDT