Dell Offers Bundled Internet Services in Bid to Reach Home Consumers

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Computer direct marketer Dell Computer Corp., Round Rock, TX, yesterday unveiled a bundled Internet-access program in which it will offer personal computers together with one year of Internet access for just under $1,000.


The company, which had been expected to make such an announcement this summer, said its Dellnet service also includes 20 megabytes of online storage space and other features, including links to e-commerce sites and a customized portal.


The initiative marks a strong effort on the part of Dell to target home consumers as opposed to its core base of corporate customers, although the company said the Dellnet program might also offer some benefits for home-office users. The move also places it on more even footing in the home-consumer market with rival direct marketer Gateway, San Diego, which has been offering Internet access through its Gateway.net service for about a year.


Paul Bell, senior vice president of Dell's home and small business group, said the company intends to continue to make serious inroads into the consumer market.


"We have every intention of becoming No. 1 in the consumer space by offering every advantage to our customers that our direct model, which we have perfected, will allow," he said. He said the company's sales to home consumers has grown about 80 percent or more per year in each of the past three years.


One of the key goals of the current effort, he said, was to establish a "lifetime relationship" with consumers, which is the same phrase Gateway often uses to describe its marketing philosophy.


Janet Mountain, vice president and general manager of Dell's consumer personal computer division, said Dell has had "good response from consumers" to its catalog, which she also said has significantly expanded its circulation.


In addition, she said the company would continue to try to reach consumers through print and TV advertising, and through the Web, where she said Dell gets about 400,000 visits each day to its consumer site.


Also included in yesterday's announcement was the formation of a new portal for Dell computer users located at www.dellnet.com, which offers links to shopping services, Web-based e-mail, directory and search services, news and other features. The portal was created for Dell by Snap.com.


In addition, the portal offers tools to help customers build their own home pages, download digital music and read tutorials about digital photography.


"We want to help consumers use their PCs in cool, new ways," Mountain said.


The site also will link to Dell's own e-commerce sites, including its new auction site and its Gigabuys site, where customers can purchase software and peripherals.


Dell also is hoping to grab a piece of the consumer market that has been bombarded with offers of free computers in exchange for signing up for Internet access.


"Everybody is cross-subsidizing everybody else," said Bell. "Those aren't necessarily business models - that's merchandising."
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