Dell plans US changes in entry-level PC pricing
- 13 July, 2006 07:16
Dell plans to announce PC pricing changes for US small business and home users. The move is expected to shift it away from promoting inexpensive, barebone computers for that market toward more mainstream configurations that cost more.
Dell declined to give details about which products will be affected.
"It will pertain to how we can create better value for customers who opt to buy products and services from us," company spokesperson, Venancio Figueroa III, said.
The move is a reaction to customer complaints about prices, according to one analyst.
Dell frequently offered low PC prices but those computers were low-end models that quickly grew more expensive when customers ask for faster processors or extra memory, an analyst with Current Analysis, Nicole D'Onofrio, said.
"Dell's pricing strategy has been a game of smoke and mirrors. It often showed a low entry-level price, but those systems were barebone PCs," she said. Customers increasingly demanded transparent pricing, D'Onofrio said. In response, many car manufacturers had adopted a model of selling cars at low prices with no negotiating.
Likewise, Dell competitors including HP, Lenovo and Acer have begun to offer more static pricing, promoting prices for popular configurations instead of stripped-down PCs.
The move could have a strong impact on Dell's profits. It has missed targets for recent quarterly earnings. The company is still the world's largest PC vendor, but second-placed HP has been growing faster.
A spokesperson for Dell Australia said the announcement would not affect its local pricing.