All, Negative blurb in Bearrons, this weekend regarding the potential threat of Emachines to Gateway & Dell. Turning of tables, what a joke...
TCI
The Price is the Brand
"The enemy of my enemy is my friend." Who said that? Was it
really Mao Tse-tung?
Whatever. But for direct-sales PC makers Dell Computer and
Gateway, that enemy is Emachines. The new kid in town has
been wildly successful hitting up middle America, forcing the two
superstars to take note -- and, perhaps, cut prices -- based on
some new demographic trends.
In a clear contrast to Dell and Gateway's rehearsed, harmonized
delivery here Wednesday, Stephen Dukker, CEO of the cocky
newcomer (which is profitable and number four in retail
computer sales in a mere four months, according to PC Data),
calls his company the Wal-Mart of the PC world.
He delightedly told investors at a panel discussion at the
Hambrecht & Quist conference that 51% of his $399-$599
machines go to first-time buyers, who can't shop online, anyway.
And 69% of those bare-bones machines end up in households
that have annual incomes between $20,000 and $34,000,
traditionally a tough market for PC makers to crack. And
word-of-mouth referrals help establish loyalty.
Clearly flustered, CFOs John Todd of Gateway and Tom
Meredith of Dell made noises about brands, broadband, service
and sustainable profits. It's interesting to note that these two
began as the low-price upstarts taking on the industry giants.
Are the tables about to turn on them? |
