Dell plans worldwide factory sell-off to cut costs

By on September 5, 2008, 12:05 PM
Dell’s complete ownership of design, manufacture, sales and distribution helped the company rule the computer business back in the day. But as the industry changed, the PC maker was forced to ditch its once strong direct-sales-only business model and go to retail channels to increase its market share. Now, it seems the company is also trying to sell its computer factories around the world in a bid to overhaul what is rapidly proving to be an ineffective manufacturing strategy.

According a Wall Street Journal report, Dell has been in negotiations with major contract manufacturers and expects to sell most or all of its facilities “within the next 18 months,” but the factory buyers would continue to build Dell machines on the sites. Selling its production sites to focus on sales and marketing may aid the company’s efforts to expand its product range, all while reducing their operating expenses.

The news comes on the heels of weaker-than-expected quarterly earnings of $616 million, down from the $746 million a year ago – despite an increase in sales.




User Comments: 1

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9Nails said:
I've purchased 1 notebook directly from Dell. It was for my kids. It was a refurbished computer, and I had to reinsert the internal wireless card and antenna to get it to work! On different occasions I've also tried to purchase one for my wife, and one for my sister-in-law. That was enough experience for me to figure out that Dell is going down hill. Their Customer Support, Pre-Sales, and Post-Sales support is the worst I've seen. And I've been in computer support since 1989. I used to like Dell's quality in 2000 - 2003, but purchasing directly from them is a pain in the wazoo. I won't purchase Dell's desktop systems at all. I've had several of them donated to my work and they're upgradability and maintenance is inferior to off-the-shelf whitebox clones that we can build. Dell needs to take note from what Apple is doing to find their way back into the business.
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