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Dell to embrace retail?

updated 11:35 am EST, Wed February 28, 2007

Dell Retail Stores

Dell may be on the verge of announcing a shift to retail sales, according to claims made in the run-up to the company's delayed fourth-quarter results call on Thursday. While unconfirmed, the allegations point to Dell partnering with an unknown large retailer to get its systems into retail shops on a wide scale.

The change will likely be triggered by the company's rapidly degrading performance, sources said. The once-unassailable Texas firm has lost share in recent months, giving up its dominance of computers to HP. The company has also seen an overhaul of its management after its latest troubles, with Michael Dell taking back the CEO position of his own company and hiring an outsider, Motorola's Ron Garriques, to handle its worldwide strategy.

Venturing into retail would moreover mark the first time the company had seriously committed to anything other than the direct sales which form the backbone of its business. Although Dell has floated test runs of retail sales and maintains a presence in malls through kiosks and its own demo-only retail stores, the company has so far opted out of making its systems readily available without an online or telephone order.

Apple, HP, and other system builders have recently enjoyed success by emphasizing the retail portions of their business, with Apple in particular often citing retail sales as key to breaking out of its niche user base.

by MacNN Staff




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