World's second largest PC maker Dell today said its net income dipped by five

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per cent in the third quarter as customers and businesses reduced spending on technology due to economic downturn.

The net income for the quarter ended October 31 stood at $727 million compared to USD 766 million in same period last year, Dell said in a statement today.

The revenues also declined by 3 per cent to USD 15,162 million during the quarter from USD 15,646 million in the year-ago period.

Dell Chairman and CEO Michael Dell said "the company would focus on cutting costs in the future" and there would be costs associated with continued headcount reduction and other business realignments.

The company said it ended the quarter with 2,200 fewer jobs than in the second quarter, and that its headcount decreased 9 per cent from the year-ago period. While the company did not offer specific guidance on sales and profit for the coming quarter, it did say that it believes global demand will continue to be soft.

"Dell believes that global IT end-user demand will continue to be challenging. Against this backdrop, the company will continue to focus on improving competitiveness, lowering costs and improving its mix of products and services to optimise liquidity, profitability and growth," Dell President (Asia Pacific and Japan Steve Felice) said.

However, he said that the impact of the company's cost cutting would be minimum in China and India. "We will continue to invest in China and India in areas such as research and development and call centre activities."

"Despite the downturn, India and China market would continue to grow for Dell, "Felice said.

Asia Business contributes 16 per cent to the overall revenue of Dell, out of which 5-6 per cent comes from India and China. Reflecting the overall spending slowdown, America's commercial had an 8 per cent decline in revenue, on a 14 per cent decline in units, the statement said.

Sales from outside the US made up 48 per cent of Dell's total revenue in the quarter. Sales in Brazil, Russia, India and China increased 20 per cent and shipments rose 43 per cent, it said.

However, Felice said that the growth in the Asia Pacific region is not enough to offset the negative impact globally. Dell's third-quarter earnings improved solidly as a result of disciplined cost management and an improved mix of products and services in a challenging demand environment, the statement said.

Earnings per share increased 9 per cent to 37 cents.