“Dell Inc., the world’s largest personal-computer maker, plans to reduce the number of promotions it offers and adopt a more uniform price system after customers complained that its discounts are confusing,” Connie Guglielmo reports for Bloomberg.
“The company will curtail rebates while reducing list prices, keeping the effective price of machines the same. As many as 80 percent of promotions will be eliminated within the next 18 months, Round Rock, Texas-based Dell said in a statement today,” Guglielmo reports.
“Chief Executive Officer Kevin Rollins is working to tap consumer demand in the U.S. after No. 2 PC maker Hewlett-Packard Co. copied Dell’s formula for trimming operating costs to offer lower-priced machines,” Guglielmo reports. “After sales growth fell last quarter to the lowest level in four years, Rollins pledged to regain Dell’s price advantage by cutting $3 billion in manufacturing, warranty and product expenses.”
Full article here.
[Thanks to MacDailyNews Reader “iSteve” for the heads up.]
Dell’s press release here.
MacDailyNews Take: Promotions or no promotions, the problem remains: Dude, you got a Dell? What are you, stupid? Only Apple Macs run both Mac OS X and Windows! Don’t buy your computer from a kiosk.
Related articles:
NY Times: Dell’s exploding laptop and other image problems – July 10, 2006
Survey shows big jump in consumer interest in buying Apple Mac; Dell takes steep slide – July 06, 2006
The Wired 40: Apple #2, Microsoft drops to #36, Dell falls off list – June 28, 2006
Time Magazine on Apple’s 13-inch MacBook: ‘Dell and HP should be very worried’ – June 07, 2006
InformationWeek: Apple Mac run Mac OS X, Windows, and Linux; Dell and HP should be concerned – May 01, 2006
Apple Mac is #1 in European education market, pushes Dell down into second place – February 03, 2006
Steve Jobs emails Apple team: Michael Dell not the best prognosticator, Apple worth more than Dell – January 16, 2006
Financial Times: Dell and Microsoft can never hope to attain Apple’s Mac aura – January 10, 2006
Michael Dell say’s he’d be happy to sell Apple’s Mac OS X if Steve Jobs decides to license – June 16, 2005
They should become a reseller for apple and just package XP and the soon to be released XP SP3 with each sale.
For the largest computer maker, Dell’s website is confusing as hell. I occaisonally go there to compare pricing on Dells versus Apple. Usually Apple wins out, because of the features built into every Mac (especially the Macbook). But finding what I want is a pain. I suppose if buying your computer is this difficult, it only prepares you for life as a Windows user.
I wonder how much they’ll save in admin from not having to update all the myriad of deals every five minutes?
Give them a month or two.
Dell will be right back to promotional pricing after sales collapse.
Ask Detroit how it works. Customers come to expect discounts.
This is a qise move from Dell. We buy Dells for our server infrastucture and every time we need a new one, we have to visit various Dell websites and call for quotes with our rep and many times we will get two ro three quotes from Dell on the same day with different pricing because of the dell division we went through.
Sadly, when I suggested we give the Apple Xserve RAID a shot, I was booted from my boss’ office.
Akido,
> Dell’s website is confusing as hell.
> I occaisonally go there to compare pricing
> on Dells versus Apple.
I agree. A major contribution to the confusion as to which computer (PC or Mac) is cheaper is due to Dell’s pricing which has been a moving target. Dell’s policy change should make things a bit easier to compare.
Yeah, but you can bet that the old bait and switch will survive as well as Dell’s famous low quality and butt-ugly looks.
Get a real computer, buy a Mac!
Wired? Who cares.
Yep. Their next step will be cardboard cases and 6 weeks built in obsolescense…
That’s the big weakness with a company like Dell. Once they hit their rock bottom price point in their commodity driven business, there is little room to move and nowhere else to go.
That’s what happen’s when you offer nothing other than a cheap price to your customers.
And don’t even say it’s their design. They must be holding a contest for most butt-ugly case designs and putting the winners into production.
Wow! Now *that’s* innovation!
Must have had that rolling around in the R&D Department for a couple of years, now.
Macaday,
I don’t think that Dell needs built in obsolescence since their computers rarely last more than a year or two. Because of this statistic, they probably make the most up to date computers in the market because they just don’t last long enough to become obsolete. Whoops.
That’s what happen’s when you offer nothing other than a cheap price to your customers.
And don’t even say it’s their design. They must be holding a contest for most butt-ugly case designs and putting the winners into production.
Agreed. When you’re targeting the market bottom, you’re not going to be supporting a leading-edge industrial design department. Literally every penny counts.
Why doesn’t Dell forget design & just have their cases be flat-sided boxes? They’d be cheaper to produce & would probably look better. If nothing else they’d be easier to stack up out of sight, where they belong.
me: Sounds like it’s your boss who should be given the boot. Last time I checked Apple’s RAID was the most cost-effective.
Dell – in a race to the bottom of the barrel. Further evidence that this is NOT a strategy Apple wants to adopt.
Rollins pledged to regain Dell’s price advantage by cutting $3 billion in manufacturing, warranty and product expenses.
“We’ve already cut expenses to the bone. Time to start chipping away at that bone!”
The way Dell will cut warranty expenses will not be by throwing more money at building better hardware.
Dell will save money on warranty expenses by not honouring warranty claims.
That should increase market share big time.
I can’t wait til Dull opens their retail stores… cuz nobody’s gonna show up except for losers!
They won’t totally get rid of promos but greatly REDUCE the number of them. They DO have way too many different deals and Joe A. Consumer is only mind boggled by them. Just look at all their newspaper,magazine ads and the Sunday ads. Not to mention web ads,etc. It is INSAIN.
Good move on their part IMHO.
Not that I care anymore! Windows free for almost 7 years here!
I bought a Dell for my Mom about 3 weeks ago. I have to say it;s a shit load nicer than my last PC (I’m a switcher). 2.8Ghz, Windows Media Center, 17″ flat panel, dvd burner, 13-in-1 media card reader, 1GB memory. All for $499.00 w/ free shipping.