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Dell to Go After Premium Market

June 03, 2005|Terril Yue Jones | Times Staff Writer

SAN FRANCISCO — This is not your father's Dell.

Taking a page from the auto industry playbook, Dell Inc. said Thursday that it planned a premium computer brand -- what one executive called "the Lexus of our lineup."

The line, to debut this year, will include desktops and laptops likely to cost $1,200 to $3,500, said Mike George, vice president of Dell's U.S. consumer business.

They will be designed for people who want more powerful computers for managing music, photos and video files and will come with "white glove" service that could include house calls, he said.

Dell's standard PCs sell for as little as $450, and the world's largest computer maker has relentlessly driven down prices and squeezed the margins of competitors. With its luxury PCs, the Round Rock, Texas-based company is aiming for a new clientele.

"When you buy a Lexus, you get a different level of treatment, and that's what we're trying to create," George said, referring to the luxury car division that is big brother to the Toyota auto brand.

Said IDC researcher analyst Roger Kay, "At first I thought it was crazy."

"But Dell has discerned that there is this snob appeal thing that they can do," Kay said. "They're motivated to do so because desktop margins stink, and they want to do anything they can to have a better-margin product. One thing to do is put on a sexier skin, wrap it with premium services and give it a new name."

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