Dell Plans Consumer Market Push

Mark Hachman

Dell Computer Corp. strode into the consumer-electronics market on Thursday, although company executives offered only vague details of the company’s plans.

Chairman and chief executive Michael Dell said that the PC giant planned to adapt its successful direct business model to the consumer market, and offer products such as the Dell W1700 17-inch LCD TV/monitor and Dell 2200MP projector to home users.

More interestingly, however, will be Dell’s plans to enter the music business, complete with a portable music player that mimics Apple Computer Inc.’s iPod. Dell’s PC line will include a “Dell Media Experience” application that will ship on all new Dimension desktops and most Inspiron notebooks and help organize the video, audio and image files that users collect.

Dell also previewed the Dell Axim X3 handheld, with integrated 802.11b wireless.

“We’re expanding our consumer electronics businesses even as our PC businesses continue to grow,” Michael Dell said in a conference call with reporters Thursday morning. Extending into the new categories gives Dell Computer a chance to “revolutionize” these products, he said.

When a reporter asked whether consumers would accept buying TVs over the Internet, Dell quipped, “Yeah, I heard that about PCs too.”

Dell is the latest PC OEM to expand further into the consumer market, although Michael Dell was quick to point out that Dell Computer does not intend to give away its leadership position in total PC sales and the number of PCs sold to the enterprise. In August, Hewlett-Packard Co. also appealed to consumers with a massive product rollout, and Gateway has diversified further with its entry into the digital camera market.

“(Consumer electronics) is a great part of our business, but it’s a piece of that business, so I wouldn’t say there’s been any change at all in our overall focus,” Dell said.

Dell and chief marketing officer Mike George offered only vague details of the products themselves, however, declining to disclose pricing, features, or when the new items would ship. All of the products will be launched in time for the holiday season, executives said.

Dell’s widened consumer focus will be centered around a redesigned, scheduled to go live sometime in October. Dell sold $2.8 billion worth of products this past year to consumer customers, and the company hopes to build upon that, George said.

Dell’s new model appears to cherry-pick some of the most successful elements from its rivals. For example, Gateway’s entrance into the TV/LCD market earlier this year was followed by claims that the PC OEM turned electronics wholesaler now ranked among the leaders in sales of low-end plasma TVs. The new W1700 LCD/TV will contain component jacks and Line-doubling technology from Faroudja Laboratories, Michaell Dell said.

Dell’s new “Digital Music Jukebox”, which uses an internal hard drive, is similar to the Apple iPod and Rio Karma, sold by Rio Audio.

Dell Computer’s strategy also ties into the vision, expressed by companies like Intel, Microsoft, and Sony, that personal computers and consumer electronics devices will be more closely integrated, and share data. For example, Gateway’s Connected DVD player can access multimedia files stored on a user’s hard drive.

Dell executives did not indicate whether or not they have similar plans. However, Michael Dell said that the PC was becoming the hub for digital content within the home, and that other consumer electronics products would soon begin “opening up” to the PC network in the home. Dell even sells broadband as part of as an incentive to bring in more multimedia data streams into the home.

“This is at the heart of our strategy to turn the PC into the digital heart of the home and allow the PC to become the hub of the digital lifestyle,” Dell said of the company’s new multimedia software applications.

One of those streams will be Dell’s new digital music service, although neither Dell nor George offered any concrete details. Dell declined to answer questions about the number of songs the service would offer or the record labels involved, choosing only to note that the labels have chosen to participate in a number of music services, not just one. Pricing and download details will be left until the launch, which will occur sometime before the holidays.

Digital-rights-management technology will be included. “We’re supporting the rollout of systems that help protect content owners,” Dell said. “In that process, we’re very engaged with content owners and endorsing and embracing DRM solutions as they emerge.”

Correction: Dell will not offer a “Dell Media Lifestyle” application, as a previous version of this story indicated. The Dell Media Lifestyle application will also not be tied to Dell’s portable music player.

Copyright © 2004 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in ExtremeTech.

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