Dell Cuts Prices On Some Commercial And Consumer Products

The company says the timing of the cuts--one day after rival Hewlett-Packard reported lower-than-expected 3Q results--is just a coincidence.

Larry Greenemeier, Contributor

August 20, 2003

1 Min Read

Less than 24 hours after rival Hewlett-Packard reported lower-than-expected financial results for its third quarter, Dell revealed price reductions on a number of commercial and consumer products. While Dell says the timing of Wednesday's announcement was purely coincidence, HP chairman and CEO Carly Fiorina admitted her company's third-quarter performance, reported after the stock markets closed on Tuesday, was hurt in part by aggressive pricing against competitors in personal systems and enterprise systems.

Dell's discounts cover a number of PC and data-center technologies. The company cut the price of its four-processor PowerEdge 6600 servers by 22%, or $2,800. Some of Dell's rack-dense servers have been reduced by as much as 10%, while prices on the company's commercial-grade Optiplex PCs have dropped $50 and certain Precision workstation configurations are down $550, the company said.

Dell's criteria regarding which products it discounts and by how much depends upon a number of factors, a company spokesman says. Some of the discounts occur when Dell is able to drive costs out of certain areas of the manufacturing process or the supply chain. Other discounts are the result of competitive pricing. And at other times, Dell will discount prices to move older technology.

HP, as expected, downplayed the significance of Dell's price cuts. "It's not always about price, which Dell clearly feels is its only competitive advantage," HP said in a statement. "Unlike Dell, HP has a lot of products and services where price is not the driver--quality, innovation, and the overall quality of customer experience is. It's a two-horse race and Dell knows it."

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