May 1, 2006 10:51 AM PDT

Dell whacks prices on select notebooks, desktops

Stung by market share losses in the first quarter, Dell is cutting prices in an effort to woo customers.

The Round Rock, Texas-based PC maker is selling an Inspiron E1505 notebook with an Intel T2300 Core Duo processor, 1GB of memory, an 80GB drive, a 15.4-inch screen and a DVD burner for $699 on Monday, down from the usual price of $1,234.

A similar notebook from Toshiba on CompUSA's site sells for $1,249, while a similar Hewlett-Packard sells for $1,199. Gateway clocks in at $999.

Dell is also selling a B110 Dimension desktop with a budget Intel Celeron chip, 256MB of memory and a 19-inch flat panel monitor for $349.

With a 17-inch CRT monitor, the same computer costs $299.

Shipping, usually $99 on budget PCs at Dell and often a wellspring of consumer complaints, is free for a limited time.

Finding the deal on Dell's Web site, however, can take some work, and Dell offers various configurations of similar deals that can be easier to find. The exact deals mentioned in this article were touted in an ad in the San Francisco Chronicle.

"We historically have made these moves to keep us competitive," said a Dell spokesman.

Although the deals are offered for a single day, Dell has a history of following up its one-day specials with similar specials on subsequent days. Back in 2004, for instance, it roughly halved the price of certain notebooks in various deals.

The price cuts in part stem from discounts on components. Excess inventories of processors and other parts are causing manufacturers and distributors to cut prices to get rid of inventories. Similar hot-spot deals will likely pop up at retailers and the Web sites of direct PC sellers over the next few weeks, if history is any guide.

Additionally, Dell is facing a backlash from business customers and consumers. Since 2004, consumers have increasingly complained about Dell's service and support while the company's satisfaction rating with businesses has bobbed up and down.

The company's prices have trended up in recent years. In 2002, the average selling price for a consumer PC from Dell was $1,084, according to research firm IDC. HP's average selling price for the same year was $1,009. The average for all manufacturers was $1,030. In the first three quarters of 2005, Dell's average selling price for U.S. consumer PCs was $854, more than $200 above HP's $651 average. The average selling price for the market as a whole was $744.

The higher prices in part come from the fact that Dell has targeted high-end and midrange buyers. The bargain segment of the market, however, has grown. Both Acer and Toshiba have benefited in recent quarters with more aggressive pricing, according to analysts.

These factors in part converged to cause Dell to lose market share in the first quarter, a very rare occurrence. Typically, Dell grows substantially faster than the market as a whole and gains market share.

If the trend continues and Dell loses market share overall for 2006, it will mark the first time that Dell on an annual basis grows slower than the market since 1989, according to Gartner. The firm doesn't have data for the years before that.

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35 comments

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Wow
I remember paying $150 for 64MB of Ram ;-(

<a class="jive-link-external" href="http://www.otherthingsnow.blogspot.com" target="_newWindow">http://www.otherthingsnow.blogspot.com</a>
Posted by SqlserverCode (165 comments )
Reply Link Flag
I sold 16K
For over 1300 dollars in 1981.
Posted by CitizenX (522 comments )
Link Flag
Shouldn't you make Dell PAY for their ads?
I know News.com has been doing little but running press releases since about 2001, but this is a new low.
Posted by M C (598 comments )
Reply Link Flag
It was Apple's turn last week...
when C|net published about "17" MacBook Pro" release. I don't think Apple paid them ad dollors. Then, why do you think Dell should pay C|net?
Posted by The_Nirvana (104 comments )
Link Flag
Doesn't Read Like A Press Release
Comments such as "a well-spring of consumer complaints" are not foder for the typical press release. Sure, it trumpets Dell's pricing against its competitors, but that's what the whole article is about. It's news, IMHO, and it deserves publication as such--someone out there who's thinking about a new computer may appreciate reading this article, rather than having it banished to some annoying flash ad he's trying to ignore!

mark d.
Posted by markdoiron (1138 comments )
Link Flag
Apple Comparison
I bet there are already sites out there latching on to the opportunity to write a story that Dell is selling Core Duo for $699, much less than Apple. They'll also fail to mention it's a one-day sale. They've done it before.

Still I have to say DELL can have some great deals from time to time. You can buy them and sell them on eBaby and make a profit.
Posted by nmcphers (261 comments )
Reply Link Flag
One-day sale?
Hmmm. This doesn't even appear to be a one-day sale.

<a class="jive-link-external" href="http://www1.us.dell.com/content/products/features.aspx/" target="_newWindow">http://www1.us.dell.com/content/products/features.aspx/</a>
entnb_e1505?c=us&#38;cs=19&#38;l=en&#38;s=dhs

It is 3:03 PM Eastern and the site shows the unit for $1033.

They should have just made it free. Even better press, REALLY
great comparison to Macs, and they still wouldn't have had to
actually ship any.
Posted by Mystigo (183 comments )
Reply Link Flag
Hard to find deal
I saw the same thing, but I didn't give up. I reread the ad and copied and pasted the coupon code in the search tool under Home/Office

It's right there ;-)
Posted by itworker--2008 (130 comments )
Link Flag
Instead of lowering prices...
...they should consider in-sourcing their crappy support and improving their product quality.

After all, it was the perception of high quality and good support that helped make them dominant in the first place.
Posted by open-mind (1027 comments )
Reply Link Flag
Your are right on...
That's one of the reasons why always buy Apple products. They
have world class support. Whenever I called I never had to wait
more 30min and they play nice music on the phone. Their
customer service guys are really nice. Every time I call, even
before asking what my problem is they tell me that should buy
Apple care -very thoughtful of them indeed.

On the other had we had Dell that had offshored their customer
support and we have to listen to gibberish everytime as a result.
I think Apple would rather shutdown their business than
offshore their customer support ;-).
Posted by The_Nirvana (104 comments )
Link Flag
I've been burned by Dell.
We've got 2 laptops, a Dell and a Compaq. We'ver
had them for about the same time. During that
time, the Dell's required a new hard drive, a
new power supply, a new battery, and a new
mainboard (external VGA connector didn't work on
the first one). The Compaq has required nothing.

That said, the 1GHz P3 Dell Inspiron runs rings
around the 1.8GHz Celeron-based Compaq. I don't
know if there are differences in caches or if
it's because the Dell is running Linux and the
Compaq is running Windows XP. Whatever, the Dell
is nice -- when it actually works.
Posted by Zymurgist (397 comments )
Link Flag
It's all about Quality & Customer Service
When people buy a desktop or laptop, they want it to work without hassle; that's not true for Dell anymore. And when people have trouble, they want to speak to someone that they can understand and who knows what they're talking about; that's not true for Dell. And Dell sent so many US jobs offshore, US customers are ticked off. If Dell isn't loyal to the US customer, then the US customer won't be loyal to Dell.
Posted by TLComputers (1 comment )
Reply Link Flag
Dell service
When people have trouble, they want to speak to someone that they can understand and who knows what they're talking about. I agree 100% with this person.
Posted by jspangler133 (1 comment )
Link Flag
I have to agree!
I had to switch from Macs to Windoze machines around 1999. Since I live in Austin, I bought a Dell Workstation as my first PC running NT. My next replacement PC was a Dell XPS running XP Pro 2.5 years ago. Both the WS and PC both work great and I'm VERY satisfied with XP Pro as an OS. However, when Vista comes out next year I will look seriously at another vendor who offers me the best, fastest and technilogically superior hardware for my money.
Shouldn't everyone?

No AMD in a SOHO machine? And, no I'm not buying an AlienWare PC.

I may even build my own using the case, power supply, DVD-RW, etc. from this XPS.
Posted by cabowabo (11 comments )
Link Flag
I Changed To HP
At the consumer level, with HP, you can go down to a local retailer, and make sure that you get what you want/ordered.

With Dell, if they screw up the order, you have to go round and round with some guy in India.
Posted by john55440 (1020 comments )
Reply Link Flag
Why Dell is loosing customer base.
The reason Dell is loosing ground is not the price it is the SERVICE. Have you ever tried getting help if your not a large bussness? It goes strait to INDIA where the english is broken and the techs are following a computer screen that tells them what to say and what to do next. That is if you don't get so pissed of you hang up for the wait time. I know that the issue with following the computer to do your troubleshooting step by step is not too bad if you can understand and or get your point across to the person your talking to (ie: if they can understand you). I know I was at one time a tech that worked for Dell when Michael Dell said the customer is our base if you treat them right they will return. Well that is why they are going some where else. Dell is not treating them right.
Posted by (5 comments )
Reply Link Flag
probably wont work
Dell has ripped off so many, they may have to give away their stuff. Even if you pay little---YOU RECEIVE NOTHING. Dell stuff is a bad investment anyway you cut it. I SPEAK FROM EXPERIENCE!!!!
Posted by (13 comments )
Reply Link Flag
Think Dell is bad, DFS are just crooks
If you think dealing with Dell's so called service (I spent 74 minutes waiting one time, after which when "Bob" with the Indian accent finally answered I said forget my tech support question, just give me an RMA) try Dell Financial Services. They run ads all the time for 0% financing and by their own admission only give to less then 10% to the people that apply. Plus DFS is the target of mumerous AG complaints and at least one class action suit in California for other unsavory credit practices.
Posted by tobyb33 (1 comment )
Reply Link Flag
DFS is a joke
I spent over 6 hours talking to tvarious permutations of these nitwits. Had an email with customer number, order number, cost, etc. When I called to check the status, no one could find it or acknowledge that the order was in their database. Also, no response to email reply.
Finally, disgusted, just ordered online, used my card to pay. Computer was running on my desk within 5 days. Unless something changes in the future, I will buy or build my next pc elsewhere. Also I will be happy to share my 'customer service' experience with anyone that asks about Dell.
Posted by dozer24 (4 comments )
Link Flag
DFS Are Criminals Plain & Simple
My first &#38; last ever Dell machine was three years ago. Not only do they use trash components configured to die upon arrival at your home or office...and...not only do they refuse to honor expensive warrantees we purchase from them...and not only do they refuse to provide even marginally useful tech support from people who can speak English (now, THAT would be a concept)...but the criminals at DFS are the worst ~ the AG investigations will address only the tip of the iceberg into Dell Bank's illegal banking practices. Wait til the DOJ gets onto DFS' case about what we used to call *red-lining* in credit decisions. Dell will get everything they deserve asa Mike's Texan bud GWB doesn't re-elected Pres. And not a moment too soon, IMHO.
Posted by i_made_this (302 comments )
Link Flag
When will Dell wake up?
They have been loosing sales because they refuse to use AMD chips. Customers demand it and they claim they will get the best technology for their customers but they don't. Intel has some good products in the notebook space and this fall if Intel is able to deliver as they claim (Not something they have a good track record on) they will have more competitive products in the desktop and server space; but AMD has the lead and will keep the lead through 2007 at least. The easist way to see that is that AMD dominates retail sales. If Dell wants back in the game they need AMD. It's that simple. A one day price cut doesn't solve their underlying problem. Oh and just so I don't forget to mention why... Price, performance, power consumption, 64-bit with real 32-bit support and hyper-threading to mention just a few things Dell lacks leadership in.
Posted by IT_Thinker (8 comments )
Reply Link Flag
Low cost for low quality...
Dell is riding on it's history of providing high quality products and high quality service. That all changed when Dell decided it needed to compete in the low-end computer wars. First to go was their included 3 year warranty, now you have to pay extra for it. The next to go was high quality and responsive phone support, now you call somewhere on the other side of the planet.
The next thing that went out the window (no pun intended) was the quality of the components that make up the system. The real problem with that is that now that spans into their "enterprise" systems. Next time you get a system from Dell whether it is the least expensive system they have or the best server or managed desktop they have, check the brands of the components.
When you check I think you will be surprised that they use at least what I consider tier 2 companies. Not that HP and the rest don't either but they don't push those same components up to their enterprise product lines.
Like one of the other posters said you can buy an HP off the shelf and if you don't like it take it back. Sending back a Dell is not as straight forward.
Dell needs to stop being an Intel only shop and then they might have a chance at the low cost arena but if they don't then they should get out and get rid of those suppliers that aren't providing tier 1 level quality components.
For the non-technical users I used to recommend Dell rather than a generic box because Dell would take care of them but I started getting calls for help when they were not getting adequate help from Dell so now I just tell them to get an HP from Circuit City since they have a good return policy, and Best Buy has in-store techs, maybe not the best but better person to person than getting frustrated over the phone.
Posted by fred dunn (793 comments )
Reply Link Flag
Dell is only for the uninformed
I have been buying from companies like monarchcomputer.com for a few years now. I think companies like Monarch Computer are the way to go because they offer what I want not what some marketing guy decided, nor what the lowest bidding OEM throws down their our throats. just my $.02
Posted by jenfriend (1 comment )
Reply Link Flag
DELL PC`S ARE PEOPLE THAT DON`T KNOW BETTER.
DELL PC`S ARE MADE OF CHEAP COMPONENTS AND YOU CAN NOT BUY PARTS FOR THEM ANYWHERE.THEIR WARRANTY ARE USELESS,WHEN YOU HAVE A PROBLEM.I SERVICED SOME AND ITS JUNK.ONLY WOMAN AND CHILDREN
BUY THEM BECAUSE THE PRICE IS CHEAP JUST LIKE THEIR PC`S.WHEN THEY BREAK AND YOU CALL INDIA,BY THE TIME THE PROBLEM IS RESOLVED THE PC IS OBSOLITE.YOU GET WHAT YOU PAY FOR,THATS WHY I BUY HP PRODUCTS.
Posted by apodlecki (3 comments )
Reply Link Flag
DELL PC`S ARE FOR PEOPLE THAT DON`T KNOW BETTER.
DELL PC`S ARE MADE OF CHEAP COMPONENTS AND YOU CAN NOT BUY PARTS FOR THEM ANYWHERE.THEIR WARRANTY ARE USELESS,WHEN YOU HAVE A PROBLEM.I SERVICED SOME AND ITS JUNK.ONLY WOMAN AND CHILDREN
BUY THEM BECAUSE THE PRICE IS CHEAP JUST LIKE THEIR PC`S.WHEN THEY BREAK AND YOU CALL INDIA,BY THE TIME THE PROBLEM IS RESOLVED THE PC IS OBSOLITE.YOU GET WHAT YOU PAY FOR,THATS WHY I BUY HP PRODUCTS.
Posted by apodlecki (3 comments )
Reply Link Flag
take comments with a grain of salt
I have a great resume of computer expertise, have worked in businesses that use hundreds of Dell computers, and have owned 5 Dells at home. All of this leads me to a very positive opinion of Dell. The whiners and company reputation assassins you find in comment lists like this should not guide your assessment.

Although it is unfortunate that Dell (like many others) relies on India for home (but not business) tech support, it's also true (in my experience) that they make quality PCs for a competitive price and that they adhere to industry standards more than some other vendors (which is valuable if you want options in upgrades, etc.). Your mileage may vary, but most of the comments on this article aren't worth the bytes on which they're printed.
Posted by heslingaj (2 comments )
Reply Link Flag
Maybe so, maybe no.
While your experience administering and managing Dells may have been positive, mine has been anything but.

My company switched from IBM to Dell about two years ago and the result has been a dramatic increase in the number of support requests and fault reports. We have had to increase our tech support capability by 50% (our headcount has otherwise been static during this period) and even these new people are overstretched.

Most of the faults concern Dell notebooks (dud trackpads, flaky harddrives, screens sprayed with dead pixels, overheating) and its a rare shipment if at least a few machines don't arrive DOA.

I have experience buying Dell for my own use as well (don't ask). About four years ago I bought a Dimension desktop system that arrived with the gfx, sound and modem cards rattling around loose in the case. How not one but three cards could have worked loose and how the machine passed Dell's supposedly stringent quality control with half of its components unattached I have no idea.

Suffice to say that my company is now seriously considering moving to another PC supplier. They have learned that a low purchase price is not much good if it comes with high support costs.

Inevitably, observations such as yours or mine are isolated cases. I would imagine that Dell products obey a normal distribution and that your excellent experience and my miserable one are outliers. Most people probably get a reasonably functional machine of reasonable quality.

Still, I personally wouldn't buy another Dell and would certainly not recommend my company buying any more.
Posted by JFDMit (180 comments )
Link Flag
Google 'dell hell'
If you're happy with Dell I'm happy for you. I've found them to
competitive in price and quality, just not in the same PC.
Posted by ChasmoeBrown (31 comments )
Link Flag
 

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