Dell to sell at Big Box prices- will this really be the end???

[ahhaa]

I've watched a number of electronics manufacturers collapse after putting their wares for sale at the BigBox outlets- going back to the Amiga at Sears and most recently Lite-On/Ilo at Walmart. (One factor I've heard rumoured is that Walmart's 'no questions asked' return policy allowed crooks to 'return' machines gutted of memory or boards, vastly increasing the 'lemon factor' and RMA costs.) Are computers now relegated to the ranks of frigs & boomboxes?

What is Dell thinking?


WalMart to sell Dell computers

Computer firm Dell has announced plans to start selling personal computers through low-cost retailer Wal-Mart. The move marks a major push by Dell into the retail market after years of relying on direct sales through the mail, phone orders and the internet.

It is hoped the strategy will boost Dell's chances against Hewlett-Packard, which overtook Dell last year as the world's biggest PC maker. Additional retailers will be added in Dell's top 10 markets, the firm said.

Initial plans are to sell Dell's lowest-priced Dimension multimedia desktop computers, also available directly from the computer maker, in about 3,500 Wal-Mart and Sam's Club stores in the US, Canada and Puerto Rico. They will be sold bundled with accessories for less than $700 (£352) from June 10.

more at: http://news.bbc.co.uk/2/hi/business/6690171.stm

[Krispy Kritter]

It would appear to be the next logical step. The majority of their market now consists of business's and knowledgable/informed pc users. Although, I would have expected a more computer oriented outlet, like Best Buy, Circuit City, etc. Most of the Wal-Mart crowd will expect to plug it in, turn it on, and it works...all the time. Which isn't always the case with pc's.

[Squash]

It looks like a response to HP's taking over as #1 from Dell last year. In the 1st quarter of this year, HP's shipments have increased 28.2%, with market share increasing from 16.5 to 19.1%.

Meanwhile, Dell's shipments for the same period decreased 6.9% and their market share decreased from 18.2% down to 15.2%.

http://news.com.com/What+Wal-Mart+means+to+Dell/2100-1042_3-6186402.html?tag=nefd.pop

HP sells at Walmart (and everywhere else, of course).

I think computers are such a common household item these days that the average consumer is more likely to buy something off-the-shelf than go online to order something unseen, unlike the more knowledgeable users of say, 10 years ago when computers in the home were much more rare.

I remember Dell stuck it's toe into the retail waters before. I personally bought a 386 Dell Dimension from Walmarts' Sam's Club chain back in the 90's. Guess it didn't work out for them back then.

Walmart's well known for squeezing its supplier's margins to the bone, so it will be interesting to see how it works out for Dell.

[Epicurus8a]

Walmart's well known for squeezing its supplier's margins to the bone, so it will be interesting to see how it works out for Dell.

http://www.jibjab.com/originals/big_box_mart

[oldandinthe way]

The consumer market requires skills that Dell has not previously demonstrated they have. The system has to be ready to perform right out of the box. It needs tools to update all of the bundled software automatically, and needs to minimize the time to get the customer off the support line and running again.

Since Dell has a history of build to order, it will probably create special models for Walmart. Whether these models have all of the consumer tools that HP/Compaq and Gateway/Emachines has remains to be seen.

Dell prices have been higher than their competitors, and justified by increased support capability, whether their support organization can handle the inflows of more consumer calls also remains to be seen.

This is a BIG RISK, not because a failure in the consumer market would be fatal, but because the damage to their reputation could totally undermine their overall pricing strategy.