Dell Launches Attack on Apple, HP

Excerpt from our One Page Annotated Wall Street Journal Summary (which you can get emailed to you every morning by signing up here):

ADVERTISING: Dell Skips Tech Talk For a More-Personal Link

• Summary: Dell launches a new ad campaign today on network and cable TV (to be followed by print and online ads) with a radically different message. Instead of stressing price and performance, Dell's new ads will focus on its ability to customize computers for individuals, and will emphasise the company's brand. Dell hasn't disclosed the cost of the new campaign, but did report ad spending of $776 million in 2005. Dell's new ad campaign follows a similar "personal" campaign launched by HP in May, dubbed "The Computer is Personal Again".
• Comment on related stocks/ETFs: Dell's new campaign plays to its competitive strength -- its ability to customize PCs for individuals due to its build-to-order manufacturing process. If successful, this could change investor perception that Dell's direct distribution strategy no longer offers the competitive advantage it once did. The key question for Dell (DELL) and HP (HPQ) is the extent to which users really need to customize their PCs, or whether, say, 5 configurations adequately address the needs of most types of users. Dell's ability to convince PC buyers of the advantates of individual customization, together with its price advantage, will determine whether Dell can recapture US retail market share from HP. Meanwhile, both the Dell and HP ad campaigns are negative for Apple's stock (AAPL) since they attack Apple in its core market -- consumers interested in photos, music and video.

Comments

[Tom B]

This is remarkable. Dell actually believe it has a "brand" to capitalize? What they are known for, primarily, is for knowing the price of everything, but the VALUE of nothing.

And they hardly have a lock on customizability.

Further, if they ARE emphasizing customizability, it means they have failed to clearly define what their stock models should be. This is hardly a virtue. My last two computer purchases were in-store stock models, and I ENJOYED the instant gratification. Still, I could have customized if wanted/needed to.

[CrossProfit]

It looks like Dell is also trying to go green…

www.triplepundit.com/p...

[Tom B]

Next thing you know, Rollins will drop the business suit and start wearing black tee shirts.....