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Dell sales brisk at Wal-Mart, according to 'report'

It's odd that anyone can say Dell Inc. (NASDAQ: DELL) is suddenly the most popular PC vendor at Wal-Mart Stores Inc. (NYSE: WMT) but, according to a new report from Pacific Crest computer hardware analyst Brent Bracelin, this is the case. While I'm not sure how this information was collected, computed and analyzed, the claims of this report are sure to garner some comments. Since the press release does not mention anything specific, was this analyst just trying to grab a headline? Something as significant as this should provide very acute data collection specifics. Not here, though. If I'm a DELL investor, "feedback from stores" is nowhere near enough information to satisfy my curiosity.

Were at least 30 Wal-Mart stores contacted (for statistical validity) and empirical sales data on Dell system sales collected? I'm wondering how some "feedback from Wal-Mart stores" can turn into a "report" that states Dell is doing well at Wal-Mart? While I don't disagree here, the specific methodology and data collection would be welcome to back up an opinion.

Oddly, though, I do agree with the report. Wal-Mart's PC offerings were quite lame and stagnant and have been for some time. When laptops are available for $400 and $500 at Best Buy Inc. (NASDAQ: BBY) or elsewhere, the cost advantage of buying a PC at Wal-Mart never materialized from what I've seen. In every Wal-Mart, the laptop systems were never turned on and the desktop systems were in a box (no display at all).

Although this is the same for Dell's newer systems at the retailer, the aisle placement and visual display real estate have been second to none. Customers recognize the Dell name (imagine that) and have apparently responded with their wallets. Is it surprising that Dell has become the most popular PC brand and seller at Wal-Mart? Not at all -- but if Dell can continue to see sales in large numbers at Wal-Mart, the PC maker may have a bright spot on its radar this year.

Dell systems now selling at Wal-Mart locations

Yesterday marked the quick-and-deliver day that PC maker Dell (NASDAQ: DELL). was to begin selling two of its Dimension E521 PC models inside Wal-Mart stores nationwide. Two models, priced at $498 and $698, will now join Hewlett-Packard, Acer and other manufacturers on Wal-Mart's (NYSE: WMT) shelves. Is this a new long-term strategy or some kind of experiment to appease Wall Streeters who are screaming for Dell to compete more heavily against Hewlett-Packard? Read on.

After having quickly looked at PCs available at www.walmart.com, the entry of Dell's desktop PCs should not really send some kind of stampeding PC sales shock wave in the collective aisles of Wal-Mart electronics departments. In fact, this "experiment" by Dell may just be a way for the retailer to get rid of some aging inventory and get its feet wet in the retail game at the same time. If you think "Dell is back in retail!" as a main theme of why it so rapidly announced and made available some of its lower-end products in the U.S. stores of the world's largest retailer, think again. This is a test or possibly a one-off activity by Dell, plain and simple.

The question is how this experiment will shape up. Will customers immediately recognize the Dell brand inside Wal-Mart stores and flock to purchase these Dimension systems? Hard to day, since Wal-Mart doesn't really break out sales of PCs (all brands) -- so who knows how many total PCs Wal-Mart actually sells (beyond industry analyst estimates). If Dell sees the limited amount of PCs is sold Wal-Mart having a tepid response there, what will it do? Move on to the next experiment? Where?

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Last updated: November 26, 2009: 05:16 AM

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