<<I think the sub-$1,000 PCs are going to hurt Dell's growth unless they decide to enter this market. The
competition will be fierce, but, let's face it, it is--BY FAR--the largest market segment, both in the U.S.
and certainly in the international arena where people are much poorer. While workstations and servers are
experiencing better growth, this is because the growth is calculated from an initially small base, and growth
rate will surely decline at some point. The market potential simply isn't that big for the workstation and
server market, so any company that just stays in that area is going to get its growth wings clipped. IMHO>>
Willliam,
I imagine that Dell's delayed entry into sub $1000 market is just a matter of where they are getting the biggest bang from their invested dollar. Given that their current market share for servers, workstations and high end PC's is still relatively small, they are still getting a high return for their growth $ by concentrating there. Once and if growth in those areas decline, they will likely concentrate more heavily on the lower margin and higher service cost area of low budget consumer PC's. IMO, Dell is very smart to spend precious investment $ in areas where margins are still high and growth potential is still high.
Also, I think Dell may be betting on the second wave of PC buying by those that have purchased the cheapos in the past year or two. Dell would much rather have that wave of upgrade buyers after they have cut their teeth on their first PC (lower service costs) and are ready for more powerful machine (higher margins). That wave might start to come to market in the next year or two, maybe as dell's market share growth in business/education/servers/notebooks begin to slack off. Just my thoughts on this.
Odeon |
