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Dell gears up to reveal Aussie retail union

By Marcus Browne, ZDNet.com.au on April 30th, 2008

Topics

retail, pc, partner, michael dell, market, hp, hardware, dell, australia, asia-pacific, acer

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Dell is set to reveal its Australian retail partner tomorrow, with observers expecting a considerable market shake-up in wake of the announcement.

After teaming with retailers in the US, the UK, China and India, the PC maker issued a notice to press this morning stating that it will reveal the identity of their Australian counterpart tomorrow.

The announcement from the Australian arm of the company comes after Dell began its retail partnerships strategy by offering PCs through retailers including Wal-Mart and Best Buy in the US, signalling a significant shift for a company that had built its business exclusively on customer-direct sales.

The manufacturer's foray into the US retail market was followed shortly by an expansion into the UK as the company partnered with Tesco, which also offered Dell machines through its stores in Ireland, Poland, Czech Republic and Slovakia.

The box-shifter has also taken the strategy to China, where earlier this month it expanded a relationship with retailer Gome to sell Dell PCs in 900 of its stores and signed up a number of other PC retail chains.

Dell founder and CEO Michael Dell announced the company's intentions to expand further into the region in March, telling press in Beijing that he planned to make Dell PCs available in 1200 cities across China by the end of the year after establishing partnerships across major Asian markets last year.

"When we look at the potential for expansion, we do see enormous opportunity ahead," Dell said to the Associated Press.

"As far as the US goes, I think the US will be OK, but not the fastest-growing. We expect more growth in Asia," he said.

Felipe Rego, associate market analyst at research firm IDC Australia, said the move into Aussie retail is not surprising. "Following the same strategy adopted in US, Europe and emerging markets such as China and Russia it was expected sooner or later Dell entering the local Australian retail market."

"The idea is basically to revamp its presence in the growing consumer market and to be able to give the ability for consumers to experience the product range before buying it; aiming at regaining its market share lost in the past," he added.

Rego told ZDNet.com.au today that he expects the announcement to shake up the local market, "bringing even more competitive pressure to the established vendors".

Michael Warrilow, director of analyst firm Hydrasight, said that the announcement will also put PC retailers under pressure — including Dell's chosen partner — as they contend with a new entry into retail.

"Dell have dabbled in a retail presence themselves ... but we'll have to keep an eye on how the HPs and Acers of this world react now that they've got an official Dell partnership to contend with," he said.

CNET News.com's Erica Ogg contributed to this report.

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