Retail pushes by Dell, Acer breathe life into U.S. PC market
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Growth of PC shipments in the U.S. nearly doubles at the end of 2007 due to the expansion into brick-and-mortar stores.
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(InfoWorld) - Even as PC sales continue double-digit growth, industry revenue is likely to decline 2.5 percent to US$198.5 billion in 2006, according to a forecast released Friday by Gartner Inc. Worldwide PC shipments are scheduled to rise 10.5 percent over last year, reaching 233.7 million units. The disparity comes because PC vendors have been slashing the prices of desktops and notebooks as they hustle to compete with each other. Another force pushing computer prices down is a series of recent price cuts by Intel Corp. and Advanced Micro Devices Inc. on their processors, the most expensive part of a PC. Now, as the holiday sales season approaches, things could get even worse for vendors like Dell Inc. and Hewlett-Packard Co. In additional to wrestling with each other, they will also have to compete with consumer electronics companies, said George Shiffler, a research director at Gartner. Shoppers have a limited number of dollars to spend on electronics. That spells trouble for PC vendors since the price of a low-end desktop is comparable to a smartphone and its accompanying service contract, he said. Flat panel TVs will also compete with PCs, since excess production capacity has lowered LCD (liquid crystal display) prices and producers are expected to cut prices further with aggressive holiday discounts. Even Microsoft Corp.'s impending launch of the new Vista OS will produce only a temporary rise in sales, Shiffler said. The Gartner study echoes weak financial results at Dell, the world's largest PC vendor. Dell blamed cost cutting and weak demand for $14.1 billion in revenue for the quarter ended Aug. 4. That number was up only 5 percent over the same period last year although Dell sold 11.6 percent more computers worldwide, climbing from 8.7 million in the second quarter of 2005 to 9.7 million this year. Looking past 2006, the flood of low-cost PCs will drive brisk sales in emerging markets through 2008, but mature markets like the U.S. will soon slump to single-digit growth, Gartner said.
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Acer has passed Lenovo as the world's third largest PC vendor with its purchase of Gateway, and now it's gunning for U.S. giant Dell.
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PC buying uptick won't last. Corporations are upgrading at a normal pace, while consumers who waited for Vista have now made the switch.
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Direct sales aren't working the same magic they once did for the PC maker. Can it now cash in at retail?
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Will a splash of color boost Dell's bottom line?
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Dell Inc., the world's second-largest computer maker, said on Thursday it will soon start selling its laptops and desktops at Asian retail chains and stores.
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Dell has scaled back the range of consumer PCs with processors from AMD that it sells on its Web site, focussing almost exclusively on systems with Intel processors.Dell&#39;s entire line of AMD-based laptops for consumers, as well as most of its AMD-based consumer desktops, will now be sold only through Dell&#39;s 10,000 retail outlets worldwide, said Dell spokeswoman Anne Camden.Except for one desktop, the Inspiron 531, which includes the AMD Athlon 64 X2 Dual-Core 4000+ processor, Dell will focus its online consumer sales on Intel-based PCs. For businesses, Dell will continue to sell a range of AMD-based systems online.The decision, made this week, could be a setback for AMD. The Intel rival received a big boost in 2006 when Dell began offering its chips in desktops, laptops, and servers.AMD-based systems tend to be priced lower than Intel-based systems, so it makes sense for Dell to ship AMD products through retail channels, said Dean McCarron, founder and principal at Mercury Research.&quot;[Dell&#39;s decision] is not that surprising given that AMD&#39;s primary strength is the consumer retail channel,&quot; he said. Price points on PCs tend to be lower in the retail market, and retail buyers are more sensitive to cost than online buyers, McCarron said.AMD said the move was part of a strategy to offer a wider range of AMD-based PCs through retail channels. &quot;We are always evaluating product offerings and how customers can access them,&quot; Camden said.Not many consumers buy systems based on the processor type, she said, and few distinguish between AMD and Intel processors. Users select PCs based mostly on price and what they will use them for, such as surfing the Web or playing music and videos, she said.Dell has expanded its in-store offerings over the past six months by signing up more retailers, including Best Buy and Wal-Mart in the U.S., Tesco in the U.K., and Bic Camera in Japan.The retail strategy helped the company expand its lead over Hewlett-Packard as the largest U.S. PC vendor in the fourth quarter of 2007, according to IDC. However, HP remained the world&#39;s largest PC dealer, topping Dell, Acer and Lenovo, IDC said.Hewlett-Packard already offers more AMD-based PCs in retail than online, so Dell&#39;s decision isn&#39;t a first, McCarron said. Until it won over top-tier PC vendors several years ago, AMD relied on the retail market and white-box vendors for its chip sales.The effect of Dell&#39;s strategy shift on AMD remains to be seen, McCarron said. It is a large and important PC vendor, but it is also a relatively new partner for AMD.AMD has suffered some setbacks recently, reporting five straight quarterly losses and delaying shipments of some new desktop and server processors. Its market share was 23 percent in the fourth quarter of 2007, down a fraction from the year before, while Intel&#39;s market share climbed slightly to 77 percent, according to IDC.
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TAIPEI/SHANGHAI  - Taiwan's Acer Inc will buy Gateway Inc for $710 million to double its U.S. presence and unseat China's Lenovo as the world's No. 3 PC maker, while dealing a blow to its efforts to grow in Europe.
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The start-up delivers its pocket-size PC to U.S. shelves.
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A fast growth rate and recent acquisitions in the U.S. and Europe will extend Acer's lead over Lenovo as the world's third-largest PC vendor.
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Offering a stark counterpoint to rival Hewlett-Packard Co., Dell Inc. (DELL) reported a nearly 30 percent jump in net income as strong sales of printers, servers and notched double-digit gains in overseas markets...
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Fingers lack of Vista demand Acer has scaled back its expectations in the PC market after an optimistic forecast earlier this year.â¦
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(InfoWorld) - Dell will begin selling two models of its desktop PCs at Wal-Mart Stores on June 10, fulfilling a series ofÂ recent hints from CEO Michael DellÂ that the company wouldÂ move beyond the direct sales modelÂ that once made it the world's largest PC vendor. Wal-Mart will sell the desktops for less than $700 each in its thousands of stores located in the U.S. and Puerto Rico, according to a Wal-Mart statement issued Thursday. The store also said it expected to offer additional Dell PC models in its Sam's Club and Wal-Mart Canada stores, but did not provide model names or dates. The Dimension Multimedia Desktop is the first model to reach Wal-Mart shelves, chosen as a good match for shoppers' demands for value pricing and proven technology, according to a statement by Gary Severson, Wal-Mart's senior vice president for entertainment and electronics. Wal-Mart already sells desktop PCs from Hewlett-Packard, Acer, and Gateway, as well as notebooks from HP, Acer, Lenovo, Toshiba, Sony, Asus, and several smaller vendors. The store also sells monitors, PDAs (personal digital assistants), and peripherals. The strategy marks a major change in how Dell sells computers. Until now, the company has taken orders over the phone or via its Web site, allowed customers to choose their own specifications and then assembled a custom-built PC for each user. That approach allowed Dell to cut its storage and logistic costs far below its competitors, undercut their prices and win new market share. But the direct-sales business model is no longer such an advantage, since competing PC vendors say they have learned their lesson and trimmed their own costs. And critics note that buyers in developing countries don't trust their postal systems enough to purchase expensive PCs through the mail. "Customers want more and new ways to buy our products and we plan on meeting their needs on a global level. Offering Dell Dimensions in Wal-Mart is a great example of this approach," said Dell spokesman Dwayne Cox in an e-mailed statement. "While we can't get into specifics, in the coming quarters there will be additional activity in support of this move into global retail. Today's announcement with Wal-Mart represents our first step. Stay tuned," he added. Dell fell behind rival HPÂ in 2006 in PC sales, and has struggled with a series of poor earnings reports and lawsuits. In an attempt to reverse those results,Â Michael Dell returned to his job as CEOÂ in January, and immediately wrote a series of corporate memos pledging broad changes in the company. Now he has acted on those words. Â
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Asian computer makers like Acer, Asustek, and Lenovo are aggressively courting U.S. consumers with high-end laptops.
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At CES 2008 next week, manufacturers won't be showing off hot new desktops; instead, sleek new notebooks will take center stage. In the United States, notebooks are already outpacing desktop PC sales by a small margin and it won't be much longer before the rest of the world catches up.
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AUSTIN, Texas _ Dell Inc. expanded its share of the personal-computer market in the third quarter, taking advantage of its traditionally strong commercial sales in the period to extend its lead over rival Hewlett-Packard Co.