Will Dell Inc.'s (NASDAQ:DELL) famous build-in-house model continue to work for its laptop business? That is the billion-dollar question of the hour as laptop computers continue to gain in popularity over bulkier and non-portable desktop computers. With larger screens, bigger hard drives and faster processors, laptops are increasingly desktop replacements.While competitors like Hewlett-Packard Company (NYSE:HPQ) and Gateway have their machines built for them in Taiwan or China by third-party manufacturers like Quanta and Wistron, Dell continues to build the majority of its laptop computers itself, according to Cnet. This allows Dell customers to custom order a laptop system with the exact specs needed instead of purchasing a pre-built computer from HP that comes in a variety of configurations. The disadvantage for HP is that it rarely knows which configurations will sell nicely and which will be duds -- hence the possibility of inventories piling up, which is a huge drag on any company in any business.
Dell's build-to-order process eliminates much of this unknown factor. The problem is that building laptops is much trickier than building desk-top computers. They require special parts and precise engineering. Workers must be highly skilled and trained for a wider variety of difficult tasks. Can Dell keep up its world-famous custom-build strategy for laptop computers as they overtake desktops in popularity and units shipped? That's a huge question, but if that strategy can be made to work, Dell may just show up the entire industry once again.
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Reader Comments (Page 1 of 1)
11-13-2006 @ 1:49PM
Frugal Frugalson said...
From my point of view, Dell's strength lies in low price and configurability.
I purchased a loaded Dell laptop a few weeks ago for about $1000. I ordered it on a Wednesday afternoon and UPS delivered it to my door on the following Monday, which was pretty impressive considering the many options that I added to the standard configuration.