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Dell Cuts Prices Up to 22 Percent
Aug 21, 2003
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Dell Inc. cut prices on computers, printers and other products by up to 22 percent, a day after its rival Hewlett-Packard Co. reported a first-ever loss in its PC business after slashing prices too aggressively. No. 1 PC maker Dell regularly pulls PC prices down, using its direct-to-customer sales method to undercut competition. In this case, the price cuts come during the crucial back-to-school season.

While Dell and HP have traded places in recent quarters as the No. 1 seller of personal computers, HP's PC business slipped to an operating loss in its quarter ended July 31. HP's loss was due partly to price cuts it made to compete with Dell and the lack of flexibility it has in changing prices on systems it sells through its distributors. HP Chief Executive Carly Fiorina said recently that prices can take 3 or 4 weeks to work their way into retail markets.

Dell sells most of its computers directly to customers, enabling it to pass on lower costs of computer parts to them. In the past few years, it has used this method to take market share from competitors like HP and Gateway Inc., which is also losing money on PCs.

Del, said its price cuts include lowering desktop computer prices by U.S. $50 to $550. Certain computers for large businesses are 22-percent lower in price, while others have been cut by up to 10 percent. Price reductions on printers and projectors ranged from 10 percent to 13 percent, and Dell cut the 17-inch flat panel monitor price by 20 percent to $399. It said the Dell J740 personal inkjet printer is now $79. (Reuters)

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