| As of last week, Dell announced that it will cut | | | | move for Dell. |
| back on mail-in rebates and make sale prices | | | | Some analysts thought Dell would introduce price |
| more accessible to customers after complaints | | | | cuts to contend with competitors Hewlett-Packard |
| that the procedure for receiving the sale price | | | | and Acer Inc. They continue to diminish Dell's |
| was too complicated. | | | | long-established price advantage thanks to |
| Analysts believe this will help boost Dell's customer | | | | cheaper components and more competent |
| relations but not necessarily its sales. Dell, the | | | | manufacturing. |
| world's largest personal computer maker said that | | | | In May, Dell publicized its plans to lower prices and |
| product prices will stay the same. | | | | is spending $100 million to improve customer |
| Dell's sales have been down in recent quarters | | | | service by hiring over 2,000 sales and support |
| with tougher competition from their number one | | | | staff. |
| competitor Hewlett-Packard. Dell which sells | | | | Dell's senior vice president of home and small |
| directly to customers through the internet and via | | | | business groups, Ro Parra said the cutback in |
| phone has had complaints of their poor after-sale | | | | promotions will not affect the "net price" that |
| performance. In the early 90's Dell's percentage | | | | customers pay but make the process of buying a |
| growth was much higher and analysts wonder if | | | | computer easier. |
| Dell can once again reach these numbers. | | | | Parra commented to reporters that customers |
| An analyst with Cross Research says, "Dell is | | | | don't like rebates and only about 80 percent |
| facing a lot of challenges. HP is just reinvigorated, | | | | redeem them. He also said "They are problematic, |
| which is one of their biggest problems. Their | | | | and our intent is to reduce them over time." |
| competitor is back." | | | | Dell as well as other retailers like Best Buy Co are |
| Dell shares ended down 68 cents, or 3 percent, | | | | cutting back mail-in rebates. They are not much |
| at $21.70, more than the Merrill Lynch Tech 100 | | | | of an incentive to customers because they must |
| index's (^MLO - news) 1.6 percent fall. | | | | fill out forms, send product codes and then wait |
| Dell anticipated a reduction of approximately 70 | | | | several months to receive a check. |
| percent per product line in the number of | | | | Dell's new focus on existing promotions will be |
| promotions for U.S. consumers and small | | | | paperless rebates which make analysts wonder if |
| businesses. Promotions connected to a single | | | | this will motivate consumers to take advantage |
| product line would decline by 80 percent. | | | | of the offers. |
| Reductions will take affect in the next 12 to 18 | | | | Research analyst Cross said "My biggest question |
| months, starting with the Inspiron notebook | | | | is, what the financial impact of this is? If you don't |
| computers and Dell monitors. | | | | get a lot of hits on mail-in rebates, and now |
| Moors and Cabot analyst Cindy Shaw said, "People | | | | you're just going to go to instant rebates or price |
| hate rebates" and she believes this is a positive | | | | cuts, then that hits everyone. |