Dell Exiting Unbranded Market

It will discontinue two lines of 'white box' PCs.
By Chris Kraeuter ,

Dell

(DELL) - Get Report

will stop selling unbranded "white box" desktop computers this month, opting instead to place its name on all of its PCs.

The world's largest computer manufacturer said it will stop selling two computers this month, the White Box 610D and the 510D, that it sells primarily to small businesses and will instead place its brand name on all of its desktop computers.

Dell started selling unbranded PCs three years ago in an effort to tap into what is a very large market populated with thousands of small, local vendors. White-box PCs are typically basic computers that are built with a low price point in mind.

"This is completely based on direct feedback from our solutions providers," says spokeswoman Roe Thiessen. "Sales were showing and feedback reflected that they preferred Dell-branded products over the unbranded white box."

Thiessen says the company remains committed to selling computers and technology products to small and medium-sized businesses and that unbranded computers represented a "very small" fraction of those sales.

"The Dell model allows us to be flexible, and we want to make sure we are offering what customers want," says Thiessen. "In this case, it's Dell brands."

The white-box decision likely won't be seen in Dell's financials, but it illustrates Dell's momentum in the desktop arena and its low-cost advantages. Dell touts itself as the low-cost leader in the PC space, thanks to its supply-chain efficiencies and its direct business model.

In 2004, Dell expanded its leading share of the global computer market by 1.2 percentage points to 16.4%, according to iSuppli. Second place went to

Hewlett-Packard

(HPQ) - Get Report

, with 10.6% share.

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