Dell defends pricing policy

PC prices will stay stable for the short term and innovation of the PC hasn't stopped, said Paul Bell, EMEA president of Dell...

PC prices will stay stable for the short term and innovation of the PC hasn't stopped, said Paul Bell, EMEA president of Dell Computer, on 18 September.

Bell was responding to Michael Capellas, chairman and chief executive officer of Compaq, who had told the IDC European IT Forum the previous day that "brutal pricing" would last and "PC innovation would stagnate".

"We expect great bargains for a while. It is a great time to buy," said Bell. "Pricing feels less brutal to us because it still is a profitable business. You will continue to see massive amounts of innovation, in size if nothing else: smaller and more portable. The PC is changing more rapidly now than in the previous ten years."

Capellas had suggested Compaq was moving away from PCs, saying his company would not strive for leadership "in the past market", but instead focused on tomorrow's next-generation devices.

Bell responded that PCs were not yet history. "We don't have to turn around and evacuate the client side - the desktops and the notebooks - because they are very healthy businesses for us," he said.

"The PC is a very solid business; there is strong demand for desktops. It is important for our customers that we're not badmouthing PCs. Our customers want to use them and want to buy them. We're investing in that area," he added.

Carly Fiorina, the Hewlett-Packard chairman and chief executive officer, took a swipe at Dell on 17 September. She claimed that Dell, with its focus on volume and velocity, would not survive in the long term as it lacks resources for research and development, sales and marketing.

Bell responded: "We're continuing to gain market share and we're earning most of the profits in the industry. Whenever someone says that we can't keep growing, it is hard to understand the logic of that."

Dell has seen its growth rate drop from 60% in recent years to an expected 20% this year, according to Bell.

"The market is growing more slowly, but it is still a very big market. We are hopeful that Europe can be one of the factors of leading us forward and creating new growth," he said.

Further information
Compaq chief sees bumpy ride ahead

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