Gary- In reading Jaffe's piece.....I don't find it particularly balanced..
He seems to see Dell's lone $999 PC offering as "raising the white flag" and Dell's primary answer to a slowing growth rate in other areas....
Not even the biggest bulls among us (or analysts) believe that having ONE PC model selling for $999 is going to make up for several % points decline in other areas....it is an extremely small piece of the business, even if it were to be successful..
Secondly, it is painfully obvious that sub-1000 now does not mean the same thing as sub-1000 12-18 months ago....Journalists and analysts formerly used sub-1000 as a substitute for "low-end" of the market......Many journalists/analysts seem to like to continue to use sub-1000 to mean the low-end of the market.....One can clearly no longer do this....also, having ONE $999 unit offering does not represent going after the low-end of the market...because it is no longer the low end! The low-end is around $500-600...thanks to E-machines and others...Dell does not play in the low end, and hasnt shown an inclination to do so....not even now....the $999 offering is best classified as addressed the lower middle-segment of the market...
A year ago, there was not a Celeron chip...and Dell's comparable offering was around $1200-1300..due to component price reductions (and Celeron), the comparable unit is now $999...this hardly represents the "white flag" that the author seems to indicate...
If Dell would come out with several models...some priced at $700-800...then I would agree with the author...
The writer neglected to mentioned the real focus of Dell's future growth: international, high-end (and some middle) consumer, storage & server, and on-line periphrials...this is clear to anyone keeping up with the company..however, I'm sure it is "NEWS" to harp on the Dell is in the sub-1000 segment (disregarding the arguments I have laid out)...
In today's frenzied, PC's are going-to-hell environment, it was a pretty shallow piece, as was his response to G. Mullineaux... |
