This snippet from the article pretty much clears up any
confusion anyone may have about Dell's position on the
sub $1000 PC. M. Dell is even more pessisimistic
about the lifecycle of the 1KPC than I am...
Dell is after the knowledgeable
consumer who knows what they want
and wants lots of it. Dell is not interested
in the low end of this market. Its
lowest-priced system for the home comes
in at $1,700. Contrast this with Compaq's
entry-level home system, a less powerful
machine priced at $1,080 with a monitor.
So-called sub-$1,000 machines made by
Compaq, Acer, Packard Bell NECand
others are flying off the shelves. Dell
knows it has no advantage there.
Dell does hope many low-end customers
will eventually want to upgrade to
higher-end machines. It expects that,
having become more computer- literate,
they will shop on the Internet. "It's my
belief that the replacement cycle of a new
sub-$1,000 customer is-at worst-18
months," says Dell's chief financial
officer, Thomas Meredith. "It's one of
the richest opportunities ever handed to
us," he says.
Won't customers who buy cheap
machines from Compaq and others stick
with those brands when it's time to
replace them? Replies Paul Bell, head of
Dell's new consumer division: "Our
research shows there just isn't a lot of
brand loyalty."
MEATHEAD |
