Quote:
Originally Posted by Bullitt
I think Dell won't let Walmart strong arm them around too much. Dell has become this successful through their online business that it seems like stepping into a storefront like Walmart is more like testing the waters.
|
I don't think Dell has any choice but to go Wal-Mart big time and fast. Dell was doing so well, in part, because Dell computers had no sales tax. When Michael Dell relinquished control to a new management team, those idiots started doing kiosks. That meant that Dells had to charge sales tax in those states.
A price advantage for Dells is lost forever. So Dell must do something to compete with Circuit City, et al selling HPs as both Compaq and HP. That market segment is people who need to touch it and who need to be manipulated by a salesman. Since Dell must now charge sales tax, then they must make up for that market loss by going after the 'we need to see it' customers and people who buy on value.
Wal-Mart is a perfect opportunity for Dell. Now that even CompUSA is folding like a rock in water, computers become even more a commodity. Circuit City, et al overhead is too high. Dell's new hope is to sell computers on Wal-Mart’s lower overhead costs.
However after all the hype, I still don't see Dells in Wal-Mart’s. That implies a serious marketing fubar - not typical of Dell and not typical of an operation run by Michael Dell.
Compounding Dell's problem is that Michael Hurd of HP has 'dirt under his fingernails'. Hurd quickly undid a big mess created by Fiorina thereby making HP a worthy competitor. This is but a new phase in the computer business as computers are finally approaching the commodity that TVs have long become. Once a product arrives in Wal-Mart, Target, et al, then it is the ultimate in a commodity. Next step, third world nations take over the industry as has already happened to IBM's computer and disk drive businesses.