Michael Dell talks consumers, retail strategy

Company founder and CEO says there's plenty of opportunity for Dell to grow with consumers.

SAN FRANCISCO--Though he was in town to discuss Dell's new storage products for small and medium-size business customers, company founder and CEO Michael Dell also took time to answer questions about the company's main business, PC sales, which is also an area in which it's recently struggled.

Dell reiterated his company's assertion that there will be more to come of its recent dabblings in selling desktops and notebooks through retail channels.

"We're going to expand to a number of places," he said. "I would expect over the next quarters you'll see several additional key retailers" that will sell Dell products. Retailers like that the company can deliver small lots of PCs to thousands of locations, he said. Though right now the few models sold retail in the U.S. are pre-configured, he said it was "a possibility" that their retail customers might be able to build their PCs to order as well.

So far Dell has announced retail relationships with Wal-Mart and Sam's Club in the U.S., Carphone Warehouse in Europe and Bic Camera in Japan. The Wal-Mart experiment has "gone well," according to vice president of marketing Mark Jarvis, one of the other executives in town for the event. "A number of stores sold out rapidly," he said. They added that though the initial volumes shipped to Wal-Mart were not large, "a full rollout" is coming.

Dell also addressed the struggle to keep up with strong demand for two new notebook models, the XPS M1330, and revamped Inspirons. When asked what customers can look forward to from Dell for the holidays, he remarked, "I think we've excited them a little too much and demand has exceeded supply." He said they would be catching up on the glut of backlogged shipments in "the next few weeks."

On the competition front, Dell said he is "confident we will be able to grow despite consolidation" in the consumer business, referring to Acer's recent acquisition of Gateway. He added that in almost every country except the U.S. his company's presence in the consumer market is only one-tenth of its commercial presence, a difference which will provide Dell with opportunities to grow.

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