Dell trying to woo customers with freebies
Friday March 30 06:00 PM EST
dailynews.yahoo.com
By Michael Kanellos CNET News.com
Dell Computer is using the PC industry's favorite marketing
technique--freebies--in an effort to entice consumers and undercut
competitors.
The PC maker is offering free MP3 players,
CD-rewritable or DVD-ROM upgrades, and other
goodies with a number of consumer laptops and
desktops. In addition, Dell isn't charging for shipping.
Some of these deals end next week, but the company
has been extending the offers.
The deals come amid one of the fiercest downturns in
the consumer PC industry in history. Slow demand,
combined with excess inventories, has forced computer manufacturers,
retailers and chipmakers to slash prices or increase rebates to goose sales.
Consumers who buy certain models of Dell's Dimension 8100 get the Dell
Audio Receiver, a home MP3 player that ordinarily sells for $199.
There are deals on other PCs too. Consumer PC buyers, for a limited time,
can upgrade from a CD-ROM drive to a CD-RW or DVD-ROM drive at
no cost, typically a $99 value.
Small-business customers, meanwhile, get double the amount of memory
free and a $100 rebate through April 5.
Round Rock, Texas-based Dell has also given away, in recent promotions,
a Casio PVS 250 handheld with select Dimension desktops or Inspiron
notebooks, as well as printers, scanners and digital cameras, according to
ARS, a market analysis company. These deals ended Thursday.
"All promotions are well-positioned to attract PC buyers wanting to
expand their digital world and save money at the same time," Toni
Duboise, the ARS desktop analyst, wrote in a research note.
"The specials change pretty often," a Dell spokesman said Friday, adding
that the trend of bundling free extras with PCs "is probably up more than it
used to be."
Free shipping, a free year of MSN Internet service and trade-in credit on
old computers are also part of Dell's current deals. In addition, the
company is giving away copies of Quicken (news - web sites) and
TurboTax with PCs, the spokesman said.
Dell is not alone in offering deals. CompUSA, among other retailers, has
been offering $100 rebates on all Intel-based PCs. And Duboise said other
PC makers have been actively bundling as well.
Giving products away for free is a way of cutting prices without
technically cutting prices, said Roger Kay, an analyst at IDC.
"When there is a lot of bundling, it is one of the signs of a fierce price
war," he said.
Concurrently, many companies are cutting costs and laying off employees.
One company, Micron Electronics, has even said it will exit the market by
selling its PC division.
Since the end of last year, Dell has reacted to the PC sales slowdown by
slashing prices in an effort to gain market share, according to analysts and
Dell executives.
Typically, Dell can cut prices faster than competitors because its
"build-to-order" manufacturing capabilities allow it to survive on lower
inventories of components. And lower inventories mean that Dell can
often take advantage of component price cuts.
The company's PC cuts, however, have moved ahead of component price
reductions, analysts said.
"Dell has declared it is going to put the hurt on its competitors through
pricing, but it can't be fun," Kay said.
The timing of the deals also is likely to consternate competitors. Gateway,
IBM and Compaq Computer all close their financial quarters this
weekend. Dell's quarter, by contrast, ends in late April. |
