Better take advantage of Dell deals while they last...

[Slikkster]

I know this post is not in and of itself a "hot deal". But considering it's ramifications upon all of us as bargain hunters, it's pertinent.

In case you missed yesterday's news cycle, Dell missed their profit goals last quarter. Sales were up, but profits were down. Their Chief Executive, Kevin Rollins, said the following rather disturbing comments for us consumers:

Chief executive Kevin Rollins said the mismatch came as the company aggressively discounted its products. 'Average selling prices were down more than we would have liked,' Rollins said.

Rollins, however, took the blame himself, saying his company's pricing strategy had been 'too aggressive'. 'We think of this as not a market phenomenon, a market-pricing phenomenon. It was us. We drove it too hard,' he said.

The implications are pretty obvious. Unless this is a cynical ploy to ramp up this quarter's sales that are still heavily discounted, it appears Dell is going to embark on a policy of less discounts. Who knows whether that means less in quantity or frequency or percentage. But it does imply there will be less discounting.

So, bear that in mind as you wait for the next big deal. Could it be time to strike now while the discounting iron is hot?

FYI...

 

[razor2025]

I call it bluff. For one thing, the only appeal Dell has over other Computer brands are its price. If they lose the price advantage, there goes their market share. Until Dell completely dominates the PC market, they'll have to keep up their low pricing.

 

[imported_Decaf]

If Dell wants to continue selling a wide range of products, they need market share. Low prices are the only way to get it. Otherwise they will be forgotten like so many other dot coms.

 

[imported_Kensai]

The only way they get any profit is to have low prices.

 

[cyberia]

I second Razor's opinion. I've been looking for a Dell PC for my sister-in-law and noticed a lack of decent ($750 off $1499) PC deals as well as a lack of decent Outlet PC deals. In fact, eBay prices on new and refurbished Dell PCs are LOWER than Dells own prices.

eBay is a very good example of supply-demand-based pricing. If eBay sellers can't command higher prices, neither will Dell.

I, as a consumer, will be driven to eBay to get a better deal on a Dell, so Dell will lose my business. If eBay sellers can't command better prices on Dell PCs they sell and Dell stops offering decent deals to those sellers, Dell will lose their business too.

Bottom line, he can make it sound like they can easily get whatever price they want, but can they? They might be big and strong, but they ain't no monopoly. Look at Intel. They are losing their edge. Dell might too.

 

[jelifah]

Decaf has wisdom. I bought my laptop from them 4 years ago because it was convenient and they were the 'it brand. But in the past 3 months I've realized they are in every product.

Want a new LCD monitor? Dell
I bought my AIW 2 weeks ago from... Dell
I recently started looking for an SD500, oh look Dell sells them

Of course the only way I know of, and am thinking of buying from, Dell is because of the bottom dollar. Jack the price up and I just move on down the road to NewEgg or ZipZoomFly, it's not like Dell is my local mom and pop store that I should support for quick access times. They are a multi Billion dollar company looking to make every nickel.

 

[TheShiz]

maybe people will buy less crap that they don't need?

 

[rubenswm]

They are a giant force in the market. Do not underestimate Dell's ability to influence prices....they don't need to compete on price to win. Look up a few case studies on google.

 

[kwo]

Hmmm....good thread/info

must think..........

 

[HDTVMan]

They make tons and tons of money every quarter. I think it best they just continue what they are doing. After all its killing all thier competitors.

 

[wildwolf]

Originally posted by: HDTVMan
They make tons and tons of money every quarter. I think it best they just continue what they are doing. After all its killing all thier competitors.

I would agree to this philosophy. Better to have some profit and more market share than your competitor.

 

[Vallybally]

Perhaps they will do like IBM did and trend away from PC Desktops to Servers and more expensive offerings. Perhaps they feel they've gotten enough market share, and the growth in market share has been slowing down, and not worth the continued cut in profits.

It's funny because I was just thinking recently how in the old days the top 3 dogs were Dell, Gateway 2000, and Micron. Now it's pretty much dominated by Dell and they are a great company. Will they last or regress? Who knows...

I suppose another factor to consider is this. They can outprice the competition, coupons or not, because they have great relationships with their manufacturers and can purchase huge bulk quantities. If they cut their coupons but not their production, will their warehouses fill up with depreciating PCs and laptops? We all know that a top-end PC today is mid-range in 6 months, low-end in 1 year.

 

[Slikkster]

Interesting that this thread was moved to OT vs. it's original Hot Deals location. I just went back to HD, and found no less than three threads that aren't about deals per se, but deal related like this. Just curious why this one was singled out for OT.

 

[neutralizer]

Doh... might need to go pick up a back to school offering of a nice 2005fpw.

 

[Budmantom]

Originally posted by: cyberia
I second Razor's opinion. I've been looking for a Dell PC for my sister-in-law and noticed a lack of decent ($750 off $1499) PC deals as well as a lack of decent Outlet PC deals. In fact, eBay prices on new and refurbished Dell PCs are LOWER than Dells own prices.

eBay is a very good example of supply-demand-based pricing. If eBay sellers can't command higher prices, neither will Dell.

I, as a consumer, will be driven to eBay to get a better deal on a Dell, so Dell will lose my business. If eBay sellers can't command better prices on Dell PCs they sell and Dell stops offering decent deals to those sellers, Dell will lose their business too.

Bottom line, he can make it sound like they can easily get whatever price they want, but can they? They might be big and strong, but they ain't no monopoly. Look at Intel. They are losing their edge. Dell might too.

WTF?

I have no idea what you are trying to say.

Tom

 

[BullsOnParade]

Perhaps they will do like IBM did and trend away from PC Desktops to Servers and more expensive offerings

Dell isn't anything like IBM.

 

[alphatarget1]

Dell is still making money, it's just the investor's unrealistic expectation for them to have 20% increases every quarter (or something).

Look at corporate/education sales, dell mostly makes money on those. I have know people spending 2k on laptops that could've been gotten much cheaper had they knew there was this thing called a "coupon".

 

[OutHouse]

like everybody else has said, Dell is still making a boatload of cash. the piece said profits were down, not Dell took a loss. The question is did they make 500billion instead of 600billion...