Dell's next step: Selling printers

Dell's next step: Selling printers

Dell Computer is taking its direct sales approach in yet another new direction: printers.

Having already diversified into the storage and switch markets, Dell Computer Corp. is taking its direct sales approach in yet another new direction: printers. This week the company unveiled four Dell-branded printers, all made by Lexmark International Inc., for consumer and workgroup use. The company also launched a program for users to buy ink and toner cartridges from the Dell Web site.

While analysts say the decision to enter the printer business is a good one for Dell, they believe it will take some time before the leading PC-maker will gain inroads into that highly competitive market.

"It's a long-term play. It's a big trial, and Dell is taking a very measured approach," says Peter Grant, principal analyst at Gartner Inc.

Grant says the printer market historically has been about innovation, and companies such as market leader HP hold hundreds of printing and imaging patents. Dell, meanwhile, is banking on its customer service.

Tim Peters, vice president and general manager of Dell Imaging and Printing, says printer software that alerts users to low ink levels and directs them to the Dell Web site and the exact refill they need is just one way that the company is setting itself apart.

Dell also offers 24-7 toll-free tech support and a base warranty with its workgroup printer that includes next-day on-site maintenance.

Analysts say the idea is to bundle printers with Dell's other products and create an installed base that will bring Dell recurring, higher-margin revenue from the printing supplies business.

David Bobzien, regional technology manager at commercial real estate firm Colliers International in Seattle, says he wouldn't hesitate to purchase a Dell printer. Bobzien uses desktops, notebooks, servers and enterprise switches from Dell.

"Are they positioned to compete with companies like HP? In time. As with their switches, it simply takes a little time, word of mouth, and things will fall in place," Bobzien says.

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