December 4, 2007
Decisions, Decisions, Decision

With the holidays coming up, way to quickly I might add, perhaps it’s time to investigate getting a new PC. Dell is selling its PCs in Staples office supply stores as evidenced by the Staples flyer in this past Sunday’s newspaper. The PC lineup includes Dell’s Inspiron 530 desktop PCs and two versions of Inspiron notebooks, as well as supplemental Dell products like all-in-one printers and flat-panel LCD monitors. These are consumer based PC’s with limited warranties and most likely off shore technical support. Buying through a retailer also limits the add-ons and bells and whistles available. These systems are pre-configured, cash and carry boxes with no customization is available.

Will this help Dell have a strong holiday sales push?
Dell’s deal with Wal-Mart was grand when it was announced, but since the company has given no specific performance figures on how well its retail effort in Wal-Mart has fared, it’s hard to gauge how customers will react to Dell’s brand in Staples. Does Staples even sell many PCs?Dell systems in Wal-Mart stores reflected an aura of older or overstocked parts assembled into PCs and dumped into Wal-Mart’s parking lot, rather than any specific computer build made for the retailer, and I’m not so sure customers have responded in droves to buy Dells inside those local Wal-Mart stores. Not enough time has gone by, though, so I could be jumping the gun here.

Last month, Wal-Mart started selling a $200 Linux-based machine
(the Everex TC2052 gPC) that we spoke of a few months ago. The initial run was around 10,000 units and now Wal-Mart is sold out. Perhaps Linux has found a niche. These PC’s don’t have what it takes to run Windows Vista, but they have enough power to do pretty much everything that users want from a PC.
Dell’s latest partnership with Staples will put its PCs and products into 1,400 more retail locations, which will instantly give it more exposure to the American buying public. Perhaps that is what Dell is going after here — mass exposure (which generates a certain amount of purchases) instead of strategic, slower partnerships. Dell is expected to strike more retail agreements in the next 12 to 18 months. Dell is now significantly behind competitor Hewlett-Packard in overall computer system sales, and these retail efforts are considered by many to be a desperate attempt to win back market share. Right now, it’s too early to attribute any success or failure in that effort.As the seasons roll around so do the quarterly PC sales numbers. It will be a chilly fall for Dell. In the third quarter, the Texas-based PC company shipped 9.8 million PCs. That was an increase of less than 4% over the same period last year, and gave the company 14% of the global market, according to The Wall Street Journal.By way of contrast, Hewlett-Packard shipped 12.8 million PCs world-wide, enough for 19% of the market and a 33% increase from the year earlier period.

Ouch…..It would appear that HP is going to report especially strong PC sales when it releases its third quarter earnings. Its shares are already at almost $53, near their 52-week high.

So, Santa… your choices are varied and numerous. Be sure to do your homework before plunking down your hard earned cash. Remember, extended warranties and effective technical support are worth a little extra money.

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