Why Dell/Wal-Mart may work
By selling at retail, Dell will reach a different kind of consumer than it currently does with its direct-only channel.
While my current Dell box at the office (Optiplex GX520 with 3 GHz Pentium 4 and 512 MB RAM) was part of a big corporate order that numbered in the hundreds of units, it isn't my first Dell.
Way back in the early '90s, pre-Web, we bought a Dell at Price Club, the warehouse store now known as Costco. It was a 386sx 25 MHz model with something like 4 MB of RAM and an 80 MB drive. It shipped with Windows 3.1, which was barely usable at the time. We mostly ran DOS (I think it was at 5.5 or 6), and that box got us on a bunch of local BBSes, plus the GEnie, Prodigy and AOL online services. Never mind that this PC couldn't run much of everything today, but in its day, it was well-built and ultra-reliable. It gave me a good impression of Dell.
Today I'd be more inclined to assemble my own system, if only to facilitate easy upgrades of the various components, from motherboard to optical drives to video, sound and networking cards. While most of us don't do all the upgrading we say we're going to do, it's nice to have the option. I still plan to replace the motherboard, drives and even power supply in the now-10-year-old This Old PC, if only to a) prove to myself that it can be done, and b) from an environmental and "simplicity" standpoint to save the case, keeping it from going into a landfill and eliminating the need for a new one. And I'm cheap.
But back to Dell. Selling through a mass-market retailer and offering customizable systems online are two very different businesses. To compete with HP/Compaq, Dell needs to be out there, side by side with its competitors.
A smarter bet for Dell would be its own mall-located, branded stores, like the Apple Store, and unlike the current Dell mall kiosks in that they'd have actual store space and actual inventory that customers could purchase and carry home. It didn't work for Gateway, but it could work for Dell (or for HP).
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Steven Rosenberg aims to learn what he does not know. He writes about it here.
Steven Rosenberg aims to learn what he does not know. He writes about it here.
Just a reminder that wal mart is just the first shoe to drop in a global consumer-retail strategy...more to come, stay tuned.
Hey, this guy RichardatDELL left a Dell e-mail address, which means he might be from Dell (or might not). But since his comment is neither outrageous nor unexpected in its predictions, I figure he probably is from Dell.
At any rate, if direct-only isn't doing it for Dell, retail is the way to go. Everybody doesn't need a built-to-order box.
What Dell has to do is weather the storm that is Windows Vista. Now I'm not saying that Vista is a total dog, since I don't have access to either the OS itself or the hardware to run it (and maybe that's the problem), but it's going to be a rocky transition.
One thing that's positive in Dell's Wal-Mart deal is Dell's willingness to give some of its processor business to AMD, which seems to have a lead (in hearts and minds, anyway) over Intel when it comes to 64-bit architecture. The more diversity Dell adds to its product line, the better.
Even though everything about Vista is high-end, what I'd like to see from Dell is a $350 laptop. Stuff it with 1 GB of RAM and a 100 GB hard drive and move that puppy out the door. That would make me a Dell convert. Not that my Dell box at work isn't performing admirably, because it is, but Dell needs to get into the low-end laptop space in a big way -- and a $350 laptop would open up entirely new market segments and plant loyalty to Dell in their minds for future PC purchases.