August 15, 2002 8:42 AM PDT

Dell's SmartStep steps down

Dude, you're not getting a SmartStep desktop.

After 10 months, Dell has basically dropped its low-price, fixed-configuration SmartStep desktop PC in favor of a variation of its new Dimension 2300 desktop.

Like the SmartStep 150D, this new Dimension--dubbed the 2300LE, or Limited Edition--will offer a set configuration. The main difference is slightly lower manufacturing costs for Dell.

All the other computers Dell sells--with the exception of SmartStep notebooks that the company will still offer--can be customized with the options that buyers choose.

The new 2300LE machine, which was launched Thursday, sells for $599--the same price and with most of the same features as the SmartStep 150D. However, it will sport a faster chip, a 1.7GHz Intel Celeron versus the 1.3GHz Celeron. Like the SmartStep, the 2300LE will feature 128MB of RAM, a 20GB hard drive, a CD-ROM drive and a 15-inch monitor.

The 2300LE's price is also $30 less than a regular Dimension 2300, which starts with the same configuration but can be fitted with more memory, a bigger hard drive, and both CD-rewritable and DVD drives.

Despite their similarities, replacing the SmartStep desktop with the 2300LE saves Dell money by eliminating components the company was no longer using in other consumer machines and thus streamlining assembly.

The move away from the SmartStep 150D was accelerated to coincide with this week's launch of the Dimension 2300, a Dell representative said, even though Dell had said Monday that the SmartStep 150D would continue shipping for a while.

The only market where the SmartStep desktop will still be available is China, where the PC made its debut under a different name.

The SmartStep isn't Dell's first attempt to lure bargain hunters. Dell's previous dabblings with separate brands designed to appeal to budget-minded buyers have met similar fates. For example, Dell dropped the WebPC, a stylish desktop that started at $999, after just a few months because of slow sales.

The SmartStep, introduced in October, had a slightly longer run.

More important than its 10-month lifespan, however, was that SmartStep proved to Dell that customers are willing to purchase a set-configuration PC directly from Dell in a manner similar to what a customer would at retail, the representative said.

Last month, Dell repositioned its newest SmartStep notebooks to counter the growing trend toward Intel Pentium 4 desktop chip-based notebooks at retail. In the process, it moved the machines from the previous starting price of $949 to a new spot at $1,499.

Dell's least expensive notebook is now its Inspiron 2600. It starts at $999.

Analysts say Dell will face stiff competition, despite the 2300LE's price.

The 2300LE is a "good product for that price, but you can get a better deal if you look around," said Steve Baker, an analyst with NPD TechWorld. "Right now, there are deals galore (at retail) because everyone is concerned about volumes for back-to-school" PC sales.

PC makers have been pouring on rebates and special offers for retail customers in the United States.

Emachines and Hewlett-Packard, for example, both offer set-configuration desktops that, after rebates, cost less than the Dimension 2300LE. HP's Pavilion 512n desktop, which features a 1.4GHz Celeron, a 60GB hard drive, a CD-RW and a DVD drive, a 15-inch monitor and an HP 3820 inkjet printer, can be found for $599 after rebates, Baker said.

In the future, the Dell representative said, the company plans to offer a Limited Edition version whenever a new low-price Dimension model appears.

 

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