Dell Computer Finally Realizes That Marketing Matters

Dell Computer (DELL is getting more colorful. It now offers certain laptop computers in 10 very appealing colors like red, green, pink, yellow, blue and of course, gray, black and white. This is just one more small sign that Michael Dell is back running the company.

He's been in the saddle for the last 5 months, trying to turnaround his namesake company after several years of slumping sales. His original model of only selling over the Internet or phones worked very well for a while and profit margins were stellar. The stock was a favorite among institutional investors. But a few missteps occurred such as the company's initial foray into laptop computers. Then the market evolved and selling only on the Internet wasn't as effective. Apple started opening stores featuring its products, and its sales took off. Dell began to lose market share.

Dell had focused mainly on the desktop. But consumers became more and more interested in lightweight, industrial strength laptops, ones that could replace their desktops but still do the workload and be portable. That was a niche that Hewlett Packard (HPQ) jumped into with great success. Furthermore, their laptops were available in many major stores where customers could touch them and see how heavy or light they really were.

Last January, after sales had slipped, and the stock was sinking, Michael Dell fired his chief executive and took his chair. He announced that Dell was going after the consumer. He hired a Motorola executive to lead Dell's global consumer business, and for the first time, the company started selling its desktop units in Wal-Marts. The consumers was king, and Dell was going to make sure the king saw what Dell had to offer.

Of course, there's plenty of competition vying for the same eyeballs and wallets. Dell is playing a new game, one where it's the new kid on the street. H-P and Acer have been duking it out for a long time in the consumer sector. It's a lot different game to play than answering the phone or taking orders over the Internet. Marketing the brand is very much part of this game.

Dell has watched Apple take customers based on beautiful designs and unique functions. So it's making Dell laptops more eye-catching, adding color to a drab product, adding a remote control for a new function (the remote is for videos). It established a consumer unit, focusing on marketing, engineering and industrial design. The company thinks new versions of consumer PC's can be designed and built within a year, rather than 18 months, with this structure.

Look for more from Dell. For a young man who started out in a college dorm room assembling custom computers, you can bet there are plenty of ideas waiting in the wings. And there's plenty of capital to make those ideas into reality.

DELL 1-yr chart

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[Long-Short Guy:]

Related:
<blockquote>
<b>Changing Dell sales strategy could boost demand for PC-use LCD panels</b>

Although prices for PC-use LCD panels are expected to peak in the third quarter, industry sources now indicate that Dell's change to its sales strategy may extend the booming demand for LCD panels throughout the year.

As Dell is diverging from direct sales to include reseller and retail channels, the company is preparing stocks for the upcoming strong seasons. The demand for notebook and LCD monitor panels from Dell in the short term is nearly ten million units, added the sources.

To build more confidence in the channel, Dell also has to prepare full inventory and products for demonstration...
</blockquote>

Source:
digitimes.com/displays...

2007 Jul 22 05:15 PM