Dell Partners with Wal-Mart to Reach the Coveted Consumer Market and Re-gain Display Share

June 19th, 2007

by Chris Connery, Vice President of PC and Large Format Commercial Displays

As Dell quietly exits the FPD TV market for its own-brand products and refocuses its efforts on the PC space under the watchful eye of Michael Dell, the question in many people’s minds is whether Dell can regain its share in the display space by going after the much coveted (and fastest growing space), the consumer market in ways that have been for the better quarter of a century very “un-Dell-like.”
Dell at Wal-Mart
Earlier last week Dell began the shipment of a Dimension PC bundled with a 19”SXGA display through Wal-Mart for $698. Dell, the undisputed market share leader in desktop displays with a 30%+ share in North America and a 15%+ share WW for Q1’07 has seen its market share in the desktop monitor market shrink in recent quarters despite being a thought leader by bringing the newest display technology to market even before many “display only” focused vendors. Dell was one of the first manufacturers to offer a 20”Wide display, one of the first to offer a 24”W and a 30”Wide display (besides Apple) and is leading again with its 27”Wide display announced earlier this year.

Pros:

  • Partnership with Wal-Mart, the world’s largest retailer
  • Immediate access to 3,400 stores
  • Targets the main area of Dell’s current weakness: general consumers
 Cons:

  • Mass merchant retailers have never been strong in PC business.
  • While 19” SXGA PC bundle at $698 sounds aggressive, for Wal-Mart customers, this is a significant dollar value.
  • According to a November 2005 New York Times article, the average income of Wal-Mart customer was $35K/year compared to $50K/year for Target and $74K/year at Costco.

If you were the President of Dell today and recognized that you needed to focus your efforts more on consumers, would you consider Wal-Mart as a good long term partner? If not, what partners would you select? Would you change your display product mix (maybe select a wide display or a multi-function display) to try to attract more digital-lifestyle type consumers? Or is convergence over-rated for your average at-home PC user?

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