Dell to Enter High-End PC Market

A CNET article on Friday reported that Dell has announced plans to enter the high-end computer market with an as-yet-unnamed premium brand. The news came at a press briefing during which company vice-president Mike George was quoted as saying "Consider this the Lexus of our lineup. Defining the high-end is no longer the gearheads who focus on feeds and speeds. These are folks who get the possibilities of what the PC can do."

The article also quoted Mr. George as noting: "I donit think those customers have a specific place to go. There is not a clear identity to go in that high-end direction. We are competing for those customers along with companies like HP, Sony, Apple, Alienware and those customers that basically build their own systems." The new computers will be desktop and laptop machines priced between US$1,200 and $3,500, with "a similar look and feel to Dellis current XPS designs such as its 9100 series PCs, and then evolve as next-generation hardware features are introduced," according to the article. The systems will come with a premium service package.

Piper Jaffray analyst Gene Munster told The Mac Observer that he thinks Dellis venture will fail, simply because "Apple has a hook into the high-end [market]. There are a lot of competitors in that space right now." Regarding the impact of this move on Appleis business, Mr. Munster felt that Apple has more going for it than Dell does: "Community, marketing and the computer interface define Apple. Thatis why people switch on the high end. Right now I can buy a PC thatis more powerful and cheaper than a Mac, so it canit be pricing thatis the issue."

As for Dellis promise of a better service package, Mr. Munster didnit think that would be an issue either. "We hear from people who buy their first Macs that they want a different experience," he explained. He said that, in his experience, the "halo effect" from the iPod is very real and is the number one reason why some consumers have moved to Macs. Number two is the fact that malware does not exist on the platform, which Dell canit do anything about because it only sells Windows-based PCs.