To: BGR who wrote (111636 ) 3/24/1999 1:41:00 PM From: Eggolas Moria Read Replies (1) | Respond to
<<That's old news to start with. Two of the articles focus on the low-to-lower end retail sector which DELL has been avoiding for some time and has recently reiterated their continued plan to do so. So I do not quite understand why you continue to find the retail sector's woes as relevant to DELL>>may be important for two reasons. First, Michael Dell has stated emphatically that he intends to increase global pc market share to 40% in the next several years. If the recent data is correct and 62% of US desktop sales is coming in the sub-$1000 area, then it is at least reasonable to assume that DELL must target the general area for an intense sales effort. I would expect them to test the waters at consecutively lower price points in an attempt to find the happy medium that permits them to make the desired sales while still maintaining a reasonable level of margin. That might not be easy if the target keeps moving. Second, the competition in the lower end of the range may be having an impact similar to what DEC encountered in the mid to late 1980s as the high-end PC's attacked the sales base of DEC's low-end minicomputers. According to Odessey, L.P., only 5% of retail desktop sales were over $1,500 (I'm going from memory on this, so if anyone has better data, please post. I won't mind being corrected.)
