Only a day after Hewlett-Packard (HPQ - Get Report) admitted flubbing an attempted price war with rival Dell (DELL - Get Report), Dell decided to exploit the misstep by pushing through its own big round of price cuts.
The Round Rock, Texas-based computer hardware maker announced price reductions of as much as 22% across its computer line, beginning today.
The price cuts apply to both enterprise and consumer PCs. For example, prices were reduced 6% on Dell's Dimension brand of desktops, and 3% on Inspiron notebooks.
Dell's move came only a day after H-P admitted it had cut prices too deeply on its own PCs -- below Dell's prices, at times -- in a backfired attempt to compete. The move hurt H-P's revenues and dumped its computer division into the red. To fix matters, H-P implied on an earnings conference call Tuesday night that it would raise prices.That makes Dell's next-day price cuts look all the more like a deliberately timed tactical response. "It's really sort of amusing that it could occur two minutes after H-P admitted they didn't know what they were doing in the consumer channel," says analyst Charlie Wolf of Needham & Co. "H-P adjusted prices, meaning they pushed them up, and now Dell goes down