What Will Dell Cut Next?

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Sep 11, 2006
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What Will Dell Cut Next?
By BlueDragon1981 - Mon, 11 Jun 2007 03:00:58 GMT
Originally Posted at: Nephrites Citadel



What Will Dell Cut Next?
Brian Caulfield, 06.07.07, 6:40 PM ET

Burlingame, Calif. -

Call it restructuring 101. First there's the management shake-up. Then you start firing the rank and file. Amid the bloodbath, no one will shed a tear for products that just aren't earning their keep.

Michael Dell seems to be following the lesson plan pretty closely as he tries to right the company he founded. Earlier this year he installed himself as chief executive; last week Dell (nasdaq: DELL - news - people ) announced it will cut 10% of its workforce, or roughly 8,800 employees.

Now the company's LCD televisions are the latest product to get the axe, if reports from Taiwan this week that contract manufacturers will soon stop squirting out flat-panel televisions for sale under the Dell brand are correct.

Dell wouldn't comment directly on the reports, but pointed to an announcement in February that Dell would sell a wide assortment of televisions from other companies--such as Sony (nyse: SNE - news - people )--on its Web site.

So what's next? Just four years ago, Dell seemed unstoppable after clawing its way to the top of the PC business. As it changed its name from "Dell Computer" to "Dell, Inc.," Dell seemed on the verge of breaking out to dominate a vast array of high-tech industries--with forays into networking gear, printers, digital music players, flat-panel televisions and storage systems.

Now many of those efforts are languishing. In the office, Dell is a long way from stealing the lead from Hewlett-Packard (nyse: HPQ - news - people ). It lags EMC (nyse: EMC - news - people ) in storage, and Cisco (nasdaq: CSCO - news - people ) in corporate networking.

But Dell's worst performers have been products geared toward consumers--who want to be able to touch and feel their products before they make their purchases. The best thing you can about Dell's attempt to compete with Apple's (nasdaq: AAPL - news - people ) iPod line is that the experiment ended in August 2006 after a roughly three-year run. "They made some bad choices," says Crawford Del Prete, vice president for client services at market researcher TNS.

The management shake up has started to help. As for cutting products that isn't a bad idea if you couldn't get them off the ground. The TV arena was not something they should have gotten into. I don't agree with them selling their pc's at WalMart. I hate WalMart so I am bias yes but I don't like that move. They are going to tarnish their name even more by selling them at discount stores such as WalMart. I could see Best Buy, CompUSA, etc... but NOT WALMART.

One thing they do need to sell at retail outlets is ink. That is one of the biggest complaints I get from people about Dell Printers.


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