PCs apart, Dell to offer music player, PDAs, TVs

NEW YORK: Dell Inc. may be preparing to start selling digital music players, handheld computers and flat-panel television sets to push further into consumer electronics markets, a Wall Street research analyst said.

Dell's top executive and founder, Michael Dell, plans to discuss the company's strategy for consumer electronics on Thursday morning during a conference call that will also include unveiling an online commerce storefront, the company has said.

A spokesman for Dell declined to comment further on the content of Thursday's announcement.

"The company seems to be laying the groundwork to enter (the) fast-growing flat-panel TV market, which could lend itself to Dell's business model," UBS analyst Ben Reitzes said in a research note. "We also expect to see new PDA's and a music player."

"Expanding into TV's seems to be a natural fit for Dell, just as printers were," Reitzes wrote.

Reitzes was not available for further comment. UBS rates Dell a "buy."

The majority of Dell's revenue is from sales of computers to businesses, but the Round Rock, Texas company has said it is interested in pushing further into the consumer market.

Last year it began selling a Dell-branded PDA and more recently it began selling inexpensive computer printers.

PC makers such as Hewlett-Packard and Gateway, struggling to make money on their PCs amid stiff competition, have also turned their eyes on consumer electronics. Gateway, for instance, has sold thousands of expensive, large plasma-screen televisions.

PC companies are particularly interested in the music sector after Apple Computer launched its own online music service earlier this year and said its customers downloaded millions of songs at $1 per song.

Dell executives said in August during an earnings conference call that they, too, are interested in consumer electronics.

While consumer products are a small portion of Dell's overall revenues, Dell's entrance into new markets can be disruptive for its competitors because of Dell's ability to use its direct-to-customer sales model to cut costs and keep prices low.

(C) Reuters