Dell will begin selling two models of its desktop PCs at Wal-Mart Stores on 10 June, fulfilling a series of recent hints from chief executive Michael Dell that the company would move beyond the direct sales model that once made it the world's largest PC vendor.
Wal-Mart will sell the desktops for less than $700 (£352.61) each in its thousands of stores located in the US and Puerto Rico, according to Wal-Mart. The store also said it expected to offer additional Dell PC models in its Sam's Club and Wal-Mart Canada stores, but did not provide model names or dates.
The Dimension Multimedia Desktop is the first model to reach Wal-Mart shelves, chosen as a good match for shoppers' demands for value pricing and proven technology, according to a statement by Gary Severson, Wal-Mart's senior vice president for entertainment and electronics.
Wal-Mart already sells desktop PCs from HP, Acer and Gateway, as well as notebooks from HP, Acer, Lenovo, Toshiba, Sony, Asus and several smaller vendors. The store also sells monitors, personal digital assistants (PDAs) and peripherals.
The strategy marks a major change in how Dell sells computers. Until now, the company has taken orders over the phone or via its website, allowed customers to choose their own specifications and then assembled a custom-built PC for each user. That approach allowed Dell to cut its storage and logistic costs far below its competitors, undercut their prices and win new market share.
But the direct-sales business model is no longer such an advantage, since competing PC vendors say they have learned their lesson and trimmed their own costs. And critics note that buyers in developing countries don't trust their postal systems enough to purchase expensive PCs through the mail.
"Customers want more and new ways to buy our products and we plan on meeting their needs on a global level. Offering Dell Dimensions in Wal-Mart is a great example of this approach," said Dell spokesman Dwayne Cox.
"While we can't get into specifics, in the coming quarters there will be additional activity in support of this move into global retail. Today's announcement with Wal-Mart represents our first step. Stay tuned," he added.
Dell fell behind rival HP in 2006 in PC sales, and has struggled with a series of poor earnings reports and lawsuits. In an attempt to reverse those results, Michael Dell returned to his job as chief executive in January, and immediately wrote a series of corporate memos pledging broad changes in the company.
The company also responded to customer demand by officially launching its first three consumer PCs running the Ubuntu 7.04 Linux operating system (OS), two desktops and an Inspiron E1505n notebook PC.
The new models give buyers a third choice when shopping for a PC at Dell: a machine with Windows installed, a machine with no OS, on which they can install one of their choice, and now a machine with Ubuntu Linux already installed. Other PC makers, including HP and Lenovo also sell PCs that run Linux, but mainly on customised machines, because retail demand for the open-source OS is tiny compared to that for Windows.
The PCs are available in the US from Dell's website http://www.dell.com/open. The laptop starts at $599 (£301.73), while the two desktops, the Dimension E520 and XPS 410n, start from $599 and $849 (£427.67) each, respectively. A comparable XPS 410 with Windows Vista Premium costs $899.
Dell is targeting the Linux enthusiast market with the PCs and said the choice of systems is a response to customer feedback collected on its www.ideastorm.com website, set up to solicit customer suggestions. Over 100,000 people participated in surveys about the systems and what kind of Linux to install in the machines, Dell said.
Dan Nystedt, IDG News Service also contributed to this report