Product (RED) is a global effort that is providing significant monetary resources to assist in the reduction of AIDS in Africa in addition to providing treatment to hard-hit countries in that region. The project has attracted sponsorships from many large tech companies, and one of the larger PC companies has now entered the fray.Dell, Inc. (NASDAQ: DELL) will now be donating $50 to $80 when specific laptop or desktop PCs are sold with Microsoft Windows Vista as the operating system. In fact, the Dell announcement of Product (RED) support was made in concert with Microsoft Corp. (NASDAQ: MSFT). My question is this: with Dell's current position in the PC industry, can it really afford to do this?
First of all, Dell's Product (RED) systems are all from its top-of-the-line XPS category, which gives the PC maker its highest margins. There's the catch -- a customer will need to spend enough on a top-flight PC to be able and goad the PC maker to donate a gas tank amount of money to Project (RED). Not that this was unexpected -- Dell can't afford to take even a $15 hit on its lower-end, razor-margin systems. Still, the PC maker will gain some good marketing mileage from this promotion.
DISCLOSURE: The author holds a long position in MSFT.
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