Computer maker Dell (Nasdaq:DELL)
disappointed the market with lower-than-expected earnings in its fourth
quarter on Thursday. The company, which has implemented a new retail-based sales strategy focusing on low cost computers, is being pinched as consumers
are walking less and less into retail shops.
Dell was once known as the quality PC brand that had value added written all over it. They were kind of like how IPods are viewed now. They sold a so-called "value-added" product.
Dell once created custom PCs made to your specifications and then shipped them right to your house. "Dude Your Getting a Dell" was an actual compliment at one time. Now there are Dell Laptops piled up like so many towels at Wal-Mart. The exclusivity and "specialness" has worn off when you see its price slashed next to massive piles of Lenovo's and Acers.
I'm not sure how successful they would be but I think the idea of Dell stores may be something to think about. Dell needs to first stop selling their PCs to retail big box stores. Then they need to redesign them so that they can be seen as cool again. They could poach some Apple talent or pay Mark Ecko or Takashi Murakami a big pile of money to design certain custom their machines.
Innovation shouldn't mean making the wires inside bend a certain way to shave off $0.10 per completed machine but actually making a laptop into a "aspiration purchase" again. Apple has done it for years.
They need to put the idea into consumers heads that buying a Dell means they would be buying an experience or a lifestyle like you would do with Macs. They would then be able to expand their margin that way.
In any case they must stop trying to compete with the dirt cheap components and Chinese labor that Lenovo or Acer has at their fingertips. Get out of the so-called Oscar Meyer part of the store and get into the so-called $7.00 Organic Dry Salami part of the store.