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Electronics Manufacturing – M528

The Dell Laptop – Market Share and Market Forecast



The object of this report is to state clearly a business projection for the predicted market share for the “Dell Laptop” in general , rather than focus on a particular model for which information on current models is limited in respect of current market performance.

Current Market Share

It was somewhat difficult to find an exact up-to-date statement of the market share Dell currently holds in the laptop market, but this report will therefore draw on figures for recent years and a conclusion will be drawn from this evidence and other researched information.



Laptop sales to exceed Desktop sales by 2011

It is now predicted that laptop computers will outsell desktop machines by 2011.As the demand for laptops increases it is necessary to look at why this is occurring.

Firstly many executive and also lower salary job positions require employees to have access to mobile computing power in the form of a laptop. This inevitably saves time in the workplace thus improving employee productivity. Secondly, as upgrades of computer software occur,it maybe that only certain users in the company require enhanced software and therefore means it is less costly to upgrade individual machines rather than a whole LAN of computer terminals.

Thirdly, it is necessary to assess how the market demand of laptops is divided up. Previously, corporations were accountable for buying 70% of laptops. However, in 2003,sales for laptops were split evenly between corporations and home consumers. Therefore, if a particular model were to be chosen it would at present make little or no difference to the market forecast in this article.However, it is predicted that corporations may take a 60% market share of all laptops sold in the coming years and therefore any market forecast will have to take this into account for any particular model sold.

As many of Dell’s competitors try to diversify in the laptop market to capture a larger proportion of market share, it is worth considering some of their product development strategies.

Hewlett Packard is attempting to obtain more business by appealing to more diverse markets similar to Dell.Considering that this is probably owing to its success in European markets where it is the smaller business users who are buying laptops its strategy seems to be working. This statement is drawn from the fact that whilst Dell had the highest sales figures in the third quarter of 2003 in the USA, HP still holds the overall market lead. Sony ,on the other hand , is using wholesale marketing to increase turnover through the Indian market, whereas Toshiba is strengthening its position in the Middle East as market leader.

It is worth taking a look at the Dell product range.

Dell Inspiron Series

The Inspiron Series was developed for the home consumer to incorporate the latest laptop technologies at affordable prices.This series offers the opportunity for customisation as opposed to the Latitude or Precision series of laptops.This would be ideal for small businesses that need flexibility in their computing requirements at affordable costs. The Inspiron series does not have great wireless networking options but could be upgraded later if necessary. Hence, this series offers flexibility.

Latitude Series

This series is aimed at business users where software standardisation is required and hence lower IT support costs.Since this series comes with flexible mobile networking, it would be ideal for a mobile sales team to use.These computers are also very light in weight weighing only 4lb in total. Some of the Latitude series of laptops use Intel Centrino Mobile technology,incorporatimg Pentium M processors, specially designed for mobile environments.These chips save battery power without sacrificing performance.

Precision Series

This series was specifically designed for business users,that require high performance.They will support CAD,DCC or GIS software.This series utilises Dual Intel Xeon processors.Hence these would be ideal for engineering applications.

Dell’s Business Strategy and Optimum Market Approach

Dell computers operate by acting as a computer assembly business buying in partly prepared parts from other companies.This not only reduces development costs but also improves business flexibility.Hewlett Packard is also operating more flexibly in the laptop market as previously.

Hence Dell is in a premium position for this type of product market, from a strategy point of view.

Market Forecast Analysis for Dell Laptops

In 2007-2008 the planned release of Vista ,Microsoft’s latest Windows Software, will cause desktop sales of computers to temporarily gain a greater market share of the PC market.However, it has been predicted that by 2011 laptops will be outselling desktop PCs.
In 2003 Dell held approximately 26-27% of the market share for laptops in the USA.The closest rival was HP Compaq with a 20% share.However, globally HP Compaq held the lead with about 17-18% market share in 2003, closely followed By Dell.This is slightly surprising since Dell’s manufacturing flexibility should have been sufficient to offer laptop customisation. An explaination may be offered by stating that as the laptop technology has developed further more recently with a wider variety of product options, more recent market figures would presumably point to greater success for Dell being able to offer greater product diversity and flexibility.

With all of these factors taken into account it is likely that Dell will further improve its marketing strategy,especially with the recruitment of the original company founder.The company now uses the philosophy of simplifying software use.However, this main not be easy to do and maintain product range customisation and diversity.

It is my prediction that Dell will hold a 20% laptop market share in 2008.

Reference

Worldwide Laptop Market-Potential and Acceptability (Electronic Version) - RocSearch Ltd 2004-2005