Dell eyes the potential of the consumer
Published: 03 Dec 2004 12:15 GMT
Mike George, chief marketing officer and general manager of the US consumer business at Dell, has the sort of resume that is getting to be fairly common at the company.
He's not a longtime member of the technology community or even a company lifer. Instead, he came from consulting firm McKinsey about four years ago. What does that mean? It means that George is a wealth of data when it comes to price points, demand elasticity and customer surveys. Editors from CNET News.com recently spoke with George about Dell's move into consumer electronics and what that portends for the competition.
How's the US consumer business looking these days?
We are pretty excited about the potential to really expand the role of the PC as the central entertainment appliance in the home and then to market an array of access and communication devices. We are really focused on the top three or four usage models around the PC and trying to make sure we have -- either through Dell directly or through our partners -- the right products and services.
For us, photography means continuing to expand our printer lineup. You have seen us morph our printer line into a line that has a pretty rich photo capability. We also sell a lot of digital cameras. That business has really grown. Today, that is all through partners like Canon and Kodak. I don't anticipate at this point a change because I think those companies have great camera lineups.
How do you decide what to go into?
We look at every category in the digital home and ask a series of questions. Can we add a lot of value to that marketplace, or do we think there is a big price umbrella to go after? Or do we think we've got some unique supply partnerships or advantages in the market? We rank ordered the priorities, and cameras just fall a little bit lower for us. It's not obvious that we bring great supply advantages, and again, we think our partners do an awfully good job. That was a very different story in printers and a very different story in TVs.
So tell us about TVs.
Consumer electronics stores are quickly moving to be digital-TV stores because they can get a 40 percent markup on those products. The reason I put the focus on big-screen digital TVs is, that's where they're getting all of their gross margins. That spells opportunity. Our plasma launch was a great example. We came in with an absolutely awesome quality 42-inch plasma TV for $3,499. Sony's product is $7,999, and the other guys are in the $5,000 to $6,000 range.
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