Dell Jumps Into Internet PC Arena

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Event Summary

11/30/99 - Dell Computer Corp. announced the Webpc, which features an Intel Celeron 433 megahertz processor, a 15-inch monitor, a printer and one year of DellNet Internet service. Prices for the new computers start at $999.

In a press release Tuesday, the company said the Webpc is the first product from its Web Products Group and is part of its "strategy of embracing the Internet in every facet of its business." This marks Dell's entry into the market of those devices known as "information appliances" or "Internet appliances". Measuring six inches wide, 10.7 inches high, and 10.1 inches deep, and weighing 10 pounds, the Webpc comes in five accent colors (for an additional $29.95) in addition to its standard Midnight Gray: Tahoe Blue, Sedona Orange, Sea Island Teal, Red River Red and Napa Purple. Customers also can order peripherals such as printers and external floppy drives in complementary Tahoe blue and Midnight gray colors.

Market Impact

Dell's market clout gives it immediate legitimacy in this new and growing market, and will increase market growth. This should also lead to faster market consolidation - having the Dell name on a product will draw customers away from the smaller "internet appliance" vendors. If/when HP and IBM deliver their appliance products, this will temporarily increase market diversification, followed by consolidation as customers gravitate to the bigger names.

This product is geared more toward the consumer market than the business market, by virtue of the iMac-like colors. We do not envision corporate customers purchasing the Webpc just because they must have a Napa Purple machine to complement their dcor. In other words, we believe penetration of this product into the corporate market will be a shadow of that in the consumer market.

User Recommendations

Users who decide to follow the internet appliance path will be interested in Dell's offering. In general terms, this product is not very different from Compaq's "iPaq" - basically a stripped-down PC with fast setup time. This is not necessarily a bad thing, but it stretches the original definition of an internet appliance (envisioned as a $200 machine). Although we feel the price tag is a little high at $999, it has a good feature set as a low-end PC.

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