On Thursday, Dell announced that it will begin selling two of its low-end PCs at Wal-Mart beginning June 10. Some greeted this development as an important one because Dell doesn't traditionally sell its computers through retail outlets, and this could be the first step before you see Dells at Best Buy and Staples. Others yawned at the announcement: after all, Dell has sold its computers at Costco before, and at CompUSA back in the early '90s. It even sold computers at Wal-Mart owned Sam's Club for a year in 1993 before deciding that it didn't like that business model. Dell also announced that it would begin selling three models with the Ubuntu Linux system preinstalled, though you shouldn't look for those models at Wal-Mart. The moves were smart in one sense: They got people talking. But are the developments a sign of desperation? See what the critics said after the jump.
"The news didn't thrill investors Thursday. Dell shares closed down 1.4% to 25.89." Investor's Business Daily,
"The dollar value of its new Wal-Mart sales won't be nearly as important or valuable as the experience it will give Dell as a retail newcomer. Altering its traditional business of selling desktops and notebooks directly to customers will require many changes, such as altering its supply chain and even how it advertises its products." CNet,
"Why isn't doing business with Wal-Mart any good, Michael? [In 1993 Michael Dell said] "This is a no- or low-return business. We like to be in businesses where we can make money, and we know how to do that in the direct business." Could things have changed since then? Well, maybe — though if anything, Wal-Mart has the same pricing power but less pull with customers." The Street,
"However, the fact that Dell is entering this Linux game means they're going to push people hard to make drivers compatible and/or open source. Fantastic for Linux users." Gizmodo,
"I have to admit, the idea of mixing Dell's closed circuit selling with the very social and mass consumer-oriented atmosphere of Wal-Mart seemed a little odd at first. I would've put money on the rekindling of their short-lived union with one of the larger electronics retailers like Best Buy. But if the name of the game truly is diversification — both in how the product is sold and whom it is being sold to--then this might turn out to be a good first step for Dell. It will be one that will almost certainly cut into profit margins, but it's pretty much agreed upon that Dell's glory days of direct selling are coming to a close." Wired.com,
"In fact it would be genius if Dell actually moved into the retail space and began to regain market share. But there is a fly in the ointment that keeps cropping up in the conversation: Dell's image as a stodgy computer maker. For years I have seen Dell as the computer for the corporate drone and the old man. Seriously, there is no pizzazz with Dell's brand." MarketWatch,
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