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Dell wraps itself in luxury

New XPS laptops, PCs and other consumer products are designed to appeal to the techno jet set. Photos: Dell's new luxury line

Dell, which has made a career out of low-cost PCs, on Wednesday unveiled a high-end line of computers, displays and televisions.

Dell's new XPS brand is the premium product line the company promised to deliver back in June. A sleek XPS logo on top of a silver-and-white chassis with black accents distinguishes XPS products from Dell's consumer brands.

Dell XPS line

The XPS desktop PCs ship with dual-core Intel processors, Nvidia graphics cards, hard-disk drives with up to 1 terabyte of data storage, and enhanced networking capabilities.

The top-shelf push comes at a time when the company has suffered from its own low-priced pursuits. Despite a booming PC market, Dell's latest earnings report showed its year-on-year sales growth fell below 15 per cent for the first time since the depths of the technology downturn in 2002.

The company blamed the dip in revenue on too many discounts on its basic models, which weakened sales of its mid-range and high-end products. In the past 12 months, Dell has offered a rapid stream of price cuts including a desktop PCs as low as $299 and laptops for about $499.

PC industry analyst Roger Kay said Dell started to recognize the effect of such deals about nine months ago, and that helped the company decide to focus more on its high-end customers.

The increased presence of other premium product PC makers such as Apple Computer, Alienware, Voodoo PC, Toshiba, and even the ThinkPad laptops from Lenovo also motivated the XPS brand, Kay said.

Dell's new line is designed to appeal to three distinct groups: PC game enthusiasts already familiar with the company's XPS products; customers who may have bought their first Dell six to 10 years ago; and entertainment-hungry households that have home networks with two or more computers.

"What we are trying to do is appeal to customers with technological experience," Dell Chairman Michael Dell said during the launch event in New York.

Desktop pricing begins at $1,099 with the XPS 400, a slimmer XPS 200 priced at $1,149 and an XPS 600 starting at $1,849. The prices includes a new 17-inch flat-panel display.

The XPS M170 notebook computer comes with a 17-inch screen and runs on a 2GHz--expandable to 2.26GHz--Intel Pentium M Processor 760. Prices start at $2,699.

Upgrades on the PCs and laptops are available, and more models will be introduced over time, Dell said.

The new Dell computers will ship Microsoft Windows XP Media Center Edition 2005, however all are currently able to run Microsoft's next-generation operating system, Vista. CEO Michael Dell said the XPS line would not initially offer an upgrade option but did say Dell is already preparing customers for the Vista launch in late 2006.

The luxury PC package also comes with a 15-month security subscription for virus and spyware protection software from McAfee.

Also as part of its luxury strategy, Dell is selling two new wide-screen digital televisions, the W5001C (50-inch) Plasma HDTV and W3201C (32-inch) LCD TV. Priced at $3,799 and $1,799, respectively, they have built-in HDTV tuners.

The new brand will be advertised just above its Dimension PC and Inspiron laptop product families, which will now be split into two categories: basic and entertainment.