Sub $1000 DELL???????
Dorine:
Here is something interesting I picked up this morning on the Sub-1000 issue and other matters.In the last paragraph the article says Dell is expected to announce some new offering of some kind in San Francisco next week,this coupled with that 'dellacution com' thing, the articles says, have fueled the intensity of 'speculation' about some internet related business.
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360 Poll
Would you consider buying a Dell sub-$1,000 PC?
Yes 66% 4
No 16% 1
Not sure 16% 1
Total Votes 6
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By Jerry Mahoney
American-Statesman Staff
Published: Feb. 19, 199
ROUND ROCK -- Up to now, Dell Computer Corp., the fastest growing personal computer company, has chosen not to compete in the sub-$1,000 PC market, the industry's fastest growing segment.
The company has proudly explained for more than a year that because it is growing so fast and so profitably, it has the "luxury" of picking in which markets it will compete.
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Meanwhile, the company's recent registration of the Internet domain name dellauction.com has sparked speculation about a new Internet business.
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On Tuesday, Chief Executive Michael Dell and chief financial officer Tom Meredith told Wall Street analysts the company was considering offering a sub-$1,000 PC.
PaineWebber analyst Don Young said he expects Dell to launch such a model for the back-to-school season, possibly as part of a more aggressive push into the consumer business.
"This move could be an indication that Dell is being pushed towards less attractive segments in order to sustain its high growth rate," Young said in a report issued after Dell's quarterly results were announced.
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Dell spokesman T.R. Reid said that with improved, low-cost processors, including Intel Corp.'s latest Celeron chip, the profitability of low-end PCs may be changing along with their performance.
"We may be able to build a way to play in there with some profitability," Reid said. "We're not interested in revenue per se, or market share per se, certainly not without a satisfactory return for our investors."
Compaq Computer Corp., the first to introduce a sub-$1,000 PC, says the business is profitable. But analysts say that's partly because Compaq and the other leaders in that business, Gateway, IBM and Hewlett-Packard Co., don't make the computers.
They get their machines from low-cost manufacturers such as Acer, Synnex and Solectron, said Bill Schaub, vice president of consumer research at Dataquest.
"They never touch the box," he said.
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Dell executives and analysts agree that Dell will rebound in that business in the current quarter, the first of its 2000 fiscal year.
In any case, some analysts aren't convinced Dell will enter the sub-$1,000 market in the near future.
"I didn't really get a sense that it is something they would be going straight into," said Schelley Olhava of IDC. "They're investigating it."
In an interview five days before Dell released earnings, Michael Dell was asked whether the company had plans to branch off its current product line.
"No," he said. "Not big changes there."
The company, which has announced partnerships with Internet service providers and cable companies in recent months, plans to announce a new offering next week in San Francisco. That, and the company's registration of dellauction.com, has fueled speculation about an Internet-related business.
Reid said Dell had no immediate plans for such a site. He said the company registered the name to reserve it for possible use later.
austin360.com
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