Hi Kemble! Hope you had a great Monday! Just saw this...What do you think? Leigh
IBM offers price cuts, fast delivery for its PCs
SOMERS, N.Y., Feb 14 (Reuters) - International Business Machines Corp. (NYSE: IBM) on Monday offered price cuts and short delivery times as part of its push to sell its personal computers directly to consumers and rival direct PC sales leader Dell Computer Corp. (NASDAQ: DELL)
"We're beefing up our ability to sell directly to those customers who want to order directly from us via the Web or telephone sales," said David Thomas, senior vice president and group executive of IBM's Personal Systems Group.
The promotions are part of IBM's plan to regain momentum in its struggling PC business and return the Personal Systems unit to profitability. In October, the Armonk-based computer maker said it would stop selling its consumer PCs in U.S. stores and redouble its focus on Internet sales.
"IBM has had to take a number of dramatic steps, because the direct model has been eating the lunch of indirect on cost," said Roger Kay, analyst with technology market research firm International Data Corp. "Most of the (computer makers) are moving to a hybrid model."
"IBM is trying to reinvent itself," he added.
IBM's promotions for U.S customers include a "Buy Today, Ship Today" on nine popular models of laptops, PCs and commercial PCs. IBM said it will ship orders the same day for customers who place orders by 3 p.m. EST.
"Small businesses and consumers don't want to wait seven days for their computer equipment to be delivered," said Thomas.
Analysts said IBM's move to cut down lead times between orders and shipping was aimed at stealing market share from Dell, which builds PCs to order and that can take days or weeks to deliver, depending on availability of components.
"With Dell, there has been frustration with the lead times," said Kay.
Dell was not immediately available for comment.
IBM is also looking to compete on price, said IBM spokeswoman Kathleen Ryan. The Armonk, N.Y computer maker said the new direct model would allow for up to 30 percent price cuts featured on the ibm.com Web site.
"IBM has always been priced high, and now they are certainly going to try to position themselves well on price," said Rob Enderle, vice president of market researchers Giga Group. "Overall, IBM is looking to provide a better customer experience than what you get from Dell." |
