To: Mohan Marette who wrote (99807 ) 2/15/1999 8:04:00 PM From: Zeeko Read Replies (1) | Respond to
Mohan I agree. With respect to personal users, and I know they make up a small share of Dell's business, avoiding the low end user demonstrates how brilliant M. Dell is. First, and most obvious, the margins are lower. But the key, just like with cars, is customer loyalty. Correct me if I'm wrong, but first time owner and computer “novice” make up the lions share of low-end buyer. Face it, computers are tools, not toys. When these users have a problem with their new Sub-1000 machine, or for that matter the OS, they typical rail and say it's the manufactures or Bill Gates fault. The impression left in their mind is, “ I just gave CPQ, GTW, CompUSA etc… a thousand dollars and little Jimmy says the computers broke again, and I'll be damned if I buy another piece of crap like this from (fill in the blank). Odds are the problem is minor from the vantage point of an intermediate/ expert user. This is not to say the problem isn't real or important to the low end user….it is. Dell is just choosing to ignore these folks and let CPG and Packard Bell hold their hand. The maintenance costs for this cohort are just to high and diminish what any of the realized any of the margins made. One of two things eventually happens to these users: they either get on the learning curve or they end up owning a very expensive paperweight. The ones who graduate now want nothing to do with the manufacture of their first machine and are left with few alternatives when it comes to having what they believe is the best. When it comes to OS choices….. well….. tuff, Gates rules. Sure computers and all their components are becoming commodities, but the impression that Dell represents the best at a reasonable premium, and I believe it does, is such a coup.
