Through The Fly's Eyes: Dell Inc
from Catherine Horner of Theflyonthewall.com
Dell Extends New Strategy to UK
While they may not appreciate the exclamation "Dude, you're getting a Dell!" the British will certainly appreciate a free laptop. One month after Dell. (DELL) began to sell its PCs at U.S. retailers Wal-Mart (WMT) and Sam's Club, the company is now looking to enter the UK retail market as well. Dell has entered into a deal with Carphone Warehouse in which the European mobile phone retail chain will give free Dell notebooks to customers who sign up for high-speed broadband Internet service beginning in September. The service plan will cost around $40 per month while what the hardware customers will receive is worth over $1000. According to an AOL spokesman, 100,000 laptops have already been stockpiled in anticipation of high demand.
So why the sudden move away from the online and telephone sale tactics that helped Dell become a PC powerhouse? Sales have been slowing for some time and the company has suffered as people begin to purchase fewer desktop PCs and are instead shopping in stores for notebooks. It makes sense, therefore, that Dell has deemed it time to enter the retail world. However, they're doing so in a slightly unconventional way, opting not to enter into premier electronics chains such as Best Buy (US) or Dixon's (UK). While some have expressed doubt as to whether Dell's partnerships with lower-end retailers will succeed, tech analyst Roger Kay of Endpoint Technologies Association believes Dell is hoping to gain better concessions for selling its PCs, stating: "They're coming in through the side door rather than through the front... They can keep building it up from there."
But while Dell's decision to ally with lesser-known electronics retailers may be a smart move, the company's approaching laptop give-away in England may not be. Internet service plans including free or deeply discounted computers are not a new development and have proved unsuccessful for PC makers in the past. Kay was positive about Carphone being able to recoup the cost of the hardware as people become more willing to pay more for high-speed Internet access, but there's no doubt that there is a certain amount of risk to this decision. Successful or not, Dell supports its latest scheme, claiming it "is a significant element in [their] evolving global retail strategy" and assuring the public "there is more to come."