Does Michael Dell want to be Donald Trump? It sure seems like it. His latest attempt at a land grab came yesterday, with the announcement of four new sub-$500 systems to be sold in China, India, and other emerging economies -- 20 countries in all, The Wall Street Journal reports.
No one should be surprised. We know from Dell's (NASDAQ:DELL) first-quarter results that market share matters most right now. Find ways to ship more units and the profits, eventually, will follow. Or so the thinking goes.
And goes and goes and goes. The new Vostro line is likely to be comparable with anything Hewlett-Packard (NYSE:HPQ) or Lenovo have to offer. What we don't know is whether volume can rise enough to make this strategy worthwhile. I see two reasons to be optimistic:
- Dell is running a tighter operation today than it was before Michael Dell returned. Dell also has 13,000 employees on the subcontinent, where it is the market leader in business PCs. Consequently, manufacturing costs for the new Vostros are likely to be lower than we'd otherwise expect.
- Apple (NASDAQ:AAPL) -- a company Dell clearly admires -- is doing the same thing with the iPhone and to great effect. Why not copy a winning strategy?
Historically, Dell has battled U.S. peers for dominance on our shores. More than 60% of its revenue is derived from North American businesses and consumers. A broader emerging-markets strategy would diversify its economic risk and, at the same time, give Michael Dell the land grab he so obviously craves. Trump couldn't do it better.
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