Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Top 5 Reasons for a Dell-Wal-Mart Hookup

Welcome to the Daily 5, our "Foolish" look at the business news that amuses us.

Dell (Nasdaq: DELL  ) and Wal-Mart (NYSE: WMT  ) are hooking up -- again. Last year, the Bentonville behemoth said it would sell Dell's PCs through 3,500 of its locations. Now, The Wall Street Journal reports that Wal-Mart wants its partner to service computers sold through its stores.

Why do this deal now? Perhaps because Dell is tired of watching Hewlett-Packard (NYSE: HPQ  ) pack in the profits as Apple's (Nasdaq: AAPL  ) Macs perform a market-share land grab. But we have less likely (OK, not-at-all likely) ideas of our own. Here are the top five reasons Dell and Wal-Mart are hooking up. Drumroll, please:

5. Because Dell needed a deeper bench to take on Best Buy's (NYSE: BBY  ) Geek Squad in corporate softball.

4. To remedy a color forecasting mishap: Where else can Dell dump all those "safety orange"-colored PCs?

3. Because Dell's still smarting over Dell Dude's drug bust -- and no one's cleaner than Mr. Smiley Face.

2. Why go to India for cheap labor when it's right here in the good 'ol U.S. of A?

And the No. 1 reason for a Dell-Wal-Mart hook-up ... Three words: Michael Dell, greeter.

Geek Squad, meet Cheap Squad
As odd as this deal strikes us, we actually like it for two reasons. First, Dell has little retail experience (ergo, not much chance of beating Apple as a seller of upscale wares). Second, Wal-Mart once wanted to be your bank. PC service is much closer to its retail roots, and here, a partner is providing all the expertise. Eat that, Best Buy.

See anything we missed? Have a different take? Post your thoughts in the comments box below.

Always further Foolishness. Always:

Neither Fool contributor Tim Beyers nor Dayana Yochim owned shares in any of the companies mentioned at the time of publication. The Motley Fool owned shares of Best Buy.

Apple and Best Buy are Stock Advisor selections. Best Buy, Dell, and Wal-Mart are Inside Value picks. Try either of these market-beating services free for 30 days. There's no obligation to subscribe. The Fool's disclosure policy welcomes you to your life. It's glad you're here.

Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 18, 2008, at 7:16 PM, sgupta17 wrote:

    There are three benefits of this partnership: cost savings, additional revenue for service, and additional revenue from in-store customization / upgrading.

    First, this article neglects the possible cost savings. If you have had a Dell laptop in a major metropolitan region, you know that they sometimes hire independent contractors to come out to your home to repair the computer. This service model is very expensive.

    Second, this article neglects the convergence of computers, television, and audio and the proliferation of wireless networking that are often difficult for novices to install for novices. This collaboration positions Dell well to exploit these two trends to sell additional hardware.

    Lastly, this partnership allows for mass customization of Dell computers. These in-store technologist could easily upgrade software and hardware for each PC sold at Walmart. By using designated Dell installers, customers could not only enjoy the benefits of customizing but also ensure that they do not void their warranty. Additionally, this could be an extended service warranty that could be an additional revenue stream to both Dell and Walmart.

    This partnership makes sense in a lot of ways including culture. Both are cost leaders and should be able to develop a model that will drive down cost and take advantage of economies of scale that produces such as HP will not be able to replicate.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 687915, ~/Articles/ArticleHandler.aspx, 10/24/2016 12:14:50 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,229.06 83.35 0.46%
S&P 500 2,149.94 8.78 0.41%
NASD 5,301.07 43.67 0.83%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
DELL.DL $0.00 Down +0.00 +0.00%
Dell CAPS Rating: *
WMT $68.85 Up +0.51 +0.75%
Wal-Mart Stores CAPS Rating: ***
AAPL $117.37 Up +0.77 +0.66%
Apple CAPS Rating: ****
BBY $39.24 Down -0.22 -0.56%
Best Buy CAPS Rating: *
HPQ $13.90 Up +0.10 +0.69%
HP CAPS Rating: ***