RE: Price cuts, sub-$1,000 PC's....
On CNBC last Thursday, Herb Greenburg (sp?), the Street.com guy, said that while CPQ has said PC sales were great this quarter, RETAILERS were reporting sales below expectations. Retailers said the new Imac wasn't meeting sales forecasts, according to Greenburg.
If this is true, it could mean that CPQ's new direct sales strategy is beginning to work. On Friday, Merrill said CPQ looked to be "on track" and the stock had a big day.
I am glad to see Dell's quick reaction. CPQ's cost structure will still be relatively high as long as they hang on to their resellers (how would you like to be in the retail computer store business right now?) With lower PC prices, there must be more units sold to achieve sales growth even if the margin is maintained as a result of falling component prices. This can also lead to the evolvement by Dell of a complete computer-and-related-item sales web page as was advocated on this thread. (I like the idea of selling digital cameras - they go with computers like peas and carrots, as Forrest says!)
Once again, Dell's management team has shown its metal!
TCB |
