Competitors shrug off Dell’s moves into LCDs, MP3s

A random survey of PC and electronic product resellers suggests they’re not intimidated by Dell Inc.’s moves into consumer electronic products.

“”I don’t see it as a major issue at all,”” said Bruce Lantz, president of Computers Plus,

a three-store chain in southern Ontario.

While the company is thinking about expanding into home electronics, Dell’s move into LCD television, MP3 players and other non-PC gear won’t give him pause.

“”If it did, why would I be selling PCs?”” he asked. “”I don’t do my business around Dell. I do my business around my customers . . . We’re offering one-to-one service to the consumer, which is the one thing Dell does not do. It probably affects the big box guys more than anybody.””

But a spokesman for Best Buy Canada said the retail giant isn’t intimidated.

“”We feel confident in the products we sell, the variety of brand names and the low prices we offer,”” said Lori de Cou, the retailer’s director of corporate communications. “”We feel we’re set up to compete against anyone.””

Dell has announced it will soon begin selling a $999 17-inch LCD TV here, the first in what it says will be a full line of flat panel displays, and two models of its Digital Juke Box, large storage portable MP3 players. They will sell for $349 and $449. Last month Dell started the expansion by offering a digital home theatre projector.

“”We think they’re going to stimulate the consumer market greatly,”” John Tyler, Dell Canada’s product manager for software and peripherals, said of the new products. “”Not only are we bringing Dell quality and service in these products, but we’re bringing them at price points consumers are going to love.””

While the goods are only available direct — and some, like the TVs available only by phone, not online — Dell does have a foothold in three Toronto-area malls, where it has kiosks so customers can see product as well as place online orders.

Dell is following companies into such as Hewlett-Packard, Sony and Apple with PC-related electronic products aimed at the home market. Microsoft Corp.’s entry is Windows XP Media Centre Edition, which is loaded on specialized PCs from partners such as HP, Sony and Dell.

Another name Dell is following is Gateway Inc., which a year ago launched a highly popular line of plasma TVs as well as other consumer electronics goods. Some of these have yet to appear in Canada, where Gateway’s retail outlets include Radio Shack and Future Shop.

That’s going to change.

“”I believe before the holiday season comes you will see Gateway CE products sold in both Radio Shack and Future Shop,”” said Steve McAllister, Gateway’s vice-president and general manager of international business.

There are two reasons vendors are targeting the home user, he said: There are greater profit margins in consumer electronics than computer products, while at the same time computer products are converging with consumer electronics.

An example, he said, is the digital camera that downloads images to the PC, which are then displayed on plasma TVs.

But retailers have an advantage over direct marketers like Dell, he said in products such as televisions.

“”Do people want to buy TVs off a Web site? Our experience is no. So in the U.S. we have 200 stores. In Canada, we expect to have several retail partners where people can go and see our TVs.””


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Howard Solomon
Howard Solomon
Currently a freelance writer. Former editor of and Computing Canada. An IT journalist since 1997, Howard has written for several of ITWC's sister publications, including Before arriving at ITWC he served as a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times.

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