Dell Offers High-Speed Internet With New PCs

Dell Computer Corp. has announced a partnership with Internet service provider Excite@Home Corp. that will make it possible for its customers to sign up for a high-speed Internet connection when they buy a desktop or notebook computer from the PC maker.

Dell will begin offering the service today as part of its new “Dell4 me” program. Customers living in an area serviced by one of the Redwood City, California-based Excite@Home’s cable partners will be able to place an order directly from a Dell customer service representative.

The deal marks the first time that Excite@Home’s high-speed cable Internet service can be ordered through a PC manufacturer. Excite@Home has been making a concerted effort to accelerate subscriber growth while reducing the time and cost of customer order processing.

Changes Everything

“High-speed Internet access changes everything,” said Janet Mountain, Dell’s president and general manager of consumer business. “Telecommuting, real-time video news feeds and the ability to purchase music, services, software and information over the Internet will soon become standard practices as high-speed Internet access enters more homes.”

Excite@Home’s high-speed Internet service is currently available in 89 markets throughout the U.S., including San Diego, Dallas, Philadelphia and Nashville. The service is about 100 times faster than a regular dial-up connection with a 56K analog modem.

Dell Takes On Apple

The Round Rock, Texas PC maker said it also will introduce a new line of notebooks that come in blue and gray. Klee Kleber, Dell’s consumer marketing director, said that the move is aimed at customers “who want a tasteful, nice-looking PC that they can carry around.”

However, some industry observers feel that the real motivation is to mount a direct challenge to Apple’s popular iBook notebook computer.

The new colored notebooks will be priced at about $1800 (US$) — about twice the price of Dell’s least expensive desktop.

Bulking Up Its E-Commerce Presence

Analysts believe that the challenge to Apple is just another piece in Dell’s long-term strategy to grow its market penetration by bulking up its offerings in tandem with its e-commerce presence. They point out that if enough of Dell’s customers sign up for the new high-speed Internet service, they will be better able to use the company’s recently launched Web sites.

When Dell launched its Gigabuys.com Web site in March, analysts saw it as a renewed push by the world’s direct computer distributor into the consumer market. Currently, about 15 percent of Dell’s revenue comes from consumer purchases — with 85 percent coming from businesses.

Observers also view Dell’s Internet store concept as one way to reinforce its ties with existing customers and build repeat sales of computer-related products. Company officials say that Dell plans to be doing 50 percent of its business online by the end of 2000.

New Features

Besides offering 30,000 computer-related products such as software, printers, digital cameras and personal digital assistants, the new enhancements fall into three categories: Product service, product recommendations and education.

Existing customers who own a Dell system will be given their own service number, which can used to receive listings of compatible software products for their computer.

Gigageeks Service

Additionally, Dell is beefing up the content on the site, offering third-party recommendations on products from PC Magazine and ZDNet. There will also be a new “Gigageeks” service, making a team of customer service representatives available via e-mail.

Finally, if a Dell customer wants to learn about digital imaging, home networking or other new technologies, the site will now provide tutorials for these subjects.

Dell Chairman Makes Moves

Meanwhile, Dell chairman and founder Michael Dell filed to sell 4 million shares of his stake in the company. It was his second sale of that size in less than a month.

The sale would have generated $195.5 million at yesterday’s closing price.

Dell controls about 14 percent of the company’s 2.55 billion shares outstanding. He sold 8 million shares in both March and June, and 4 million in late August.