Dell Misfires on PDA Strategy
Users will be better served by Palm 0S-based devices, which are easier to operate.Dells entry into the PDA space with sub-$200 and sub-$300 devices scared the heck out of competitors. Then they actually saw the devices and went back to their normal lives. Ho-hum was the collective reaction. One has to wonder what Dell is doing in the space. The company is clearly trying to undercut rivals on price. In general, however, the Dell strategy misses the mark. First, Dell appears to be losing money on the devices. According to sources at a competitor that evaluated the same design that Dell chose with its low-priced Axim, the hardware alone costs $175 per unit. Add $15 for the supporting warranty, $25 more to Microsoft for the operating system, and you have a $215 device. And, thats the least it will costmarketing and sales costs will jack up Dells internal price even more.
Dell is selling the Axim X5 for $199 after a $50 rebate. Dell may also be losing money on the Advanced model of the X5, which sells for $299, or significantly less than the competition for similar functionality. For what, though? Consumers will be better served by Palm OS-based devices, which are easier to operate and less expensive.