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To: BelowTheCrowd who wrote (3751)	12/10/2001 4:50:38 PM
From: Oeconomicus	Respond to of 4722

Michael, while keeping the retailers happy may be necessary to protect printer sales, I was suggesting the use of the direct channel to build business sales of PCs. Personally, most business PC users/buyers that I know (except those who work for HP) a likely to look first at buying Dells online (if they aren't so cheap that they buy locally assembled no-name boxes). It is incredibly easy (the ease of use of the site, compared to HP and others, becomes even clearer when you want to customize a system) and the pricing is always good. The same channel works well for selling servers to small & mid-sized businesses too. These customers are not going to walk into Best Buy and buy a Pavilion with XP Home Edition, and killer sound and graphics. The retailers are not harmed by direct selling to this market. OTOH, it doesn't take a commissioned salesman to customize a couple business desktops or a workgroup server. It is much more efficient to reach and serve these customers through direct, online sales and the business can be profitable this way. As for retailers playing your brand off against your competitors, that problem is not as big as it used to be, IMO. A quick sampling of this Sunday's newspaper inserts in Atlanta finds the following consumer desktop competition: Best Buy - HP, Compaq, Sony Vaio and eMachines with HP the most prominent brand (4 desktop models to 2 for Sony and 1 each for the others). CompUSA - HP, Compaq, Sony and eMachines. Circuit City - HP, Compaq and eMachines. Staples - HP and Compaq. Office Depot - HP only. Office Max - HP only. Sony is aiming for a higher price point, eMachines a MUCH lower one and Compaq's brand is much weaker on the consumer side (IMO). BTW, the strength and visibility of HP's brand in printing and imaging (with these same retailers and in the marketplace in general), only strengthens their brand in consumer PCs. IMO, of course. Like I said, HP's competitive position is only going to improve. Bob PS: I do wonder who designed those ugly monitors HP is selling with the Pavilion systems. They should follow Carly out the door.