January 31, 2003 11:38 AM PST

Dell to send SmartStep on spring vacation

Dell Computer is winding down its SmartStep line of inexpensive, nonconfigurable notebook computers.

The Round Rock, Texas, PC maker took the first step in a plan to shelve the SmartStep brand later this spring by quietly discontinuing the SmartStep N250 recently.

For now at least, Dell will continue selling the SmartStep 200N notebook.

Dell will put the brand on "hiatus," a company representative said, because the company will be able to meet the same prices and configurations of the SmartStep models with new offerings in its traditional Inspiron notebook line.

"It would be a good move to discontinue the SmartStep brand because the Inspiron brand is more powerful, and I don't think Dell's resources should be going toward a low-end SmartStep brand," said Brooks Gray, an analyst with Technology Business Research.

Dell has never been shy about shifting gears with its product lines. The company suspended sales of its SmartStep desktop model last August because it could match the machine's lower price with a new Dimension model, while saving money by sharing components with other Dimensions, the company said at the time.

Dell was quick to drop its WebPC back in 1999. Dell discontinued the stylish, $999 desktop after just a few months, citing slow sales. It has phased out other products, such as its Digital Audio Receiver music product, for similar reasons.

Dell plans to replace its remaining SmartStep notebook, the 200N model, with a new Inspiron model with a similar configuration this spring.

The new Inspiron, based on one of Intel's desktop Pentium 4 chips, will cost less than the SmartStep and address consumers' growing appetite for purchasing notebooks that offer Intel's faster and cheaper desktop Pentium 4 processors, the representative said.

"We can now do a customizable configuration for lower cost because of price and cost declines across the industry and better efficiencies on our part," the representative said, explaining why the move makes sense to Dell.

Because Dell can now hit even lower prices with its main product lines, the allure of SmartStep's price may have become irrelevant to both the PC maker and its customers, analysts said.

The SmartStep PC line was created as a vehicle to compete with retailers who catered to consumers comfortable with buying only preconfigured systems and who might feel uneasy about customizing a PC. The SmartStep line also served to test out new ideas, such as using desktop Pentium 4 chips inside notebooks, computers with fixed configurations and studying sales volumes from lower-end customers.

Contrary to its original thinking that offering computers with fixed configurations would lure customers that traditionally bought from retail stores, Dell found that customers actually wanted the ability to configure their PC.

Dell wouldn't say when or if the brand will return from hiatus.

The remaining SmartStep 200N notebook will sell for $1,299 and include a 2GHz desktop Pentium 4 chip from Intel, a 15-inch display, 256MB of RAM, a 30GB hard drive and a combination CD-Rewritable/DVD-ROM drive. The machine is designed to compete with notebooks fitted with desktop processors from competitors like Toshiba and Hewlett-Packard.

 

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