Friday, May 25, 2007

Dell Grasps Wal-Mart

Dell (NasdaqGS:DELL) will now sell computers through Wal-Mart (NYSE:WMT) Dell is proving to be a one trick pony whose day is over. Computer purchases are usually important decisions requiring substantial sales support. Wal-Mart does not have the skill or desire to be a knowledgeable sales support specialist. You do not go to Wal-Mart with questions. Their consumer electronics area has not done well in the past. Adding yesterdays star will not change this deficiency.

Dell made its bones by developing the new paradigm for PC distribution. It has been by passed by companies offering better products. Dell does not have a better product and probably will not come up with one. Tinkering with its distribution does not address the fundamental problem.

I fear for Dell
. It will make a few deals with large retailers and increase costs by attempting to customize for each retail chain. Then when customers look at Dell product right beside the competition and buy the better product Dell will realize how deep a hole they really are in.