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Dell's sales have been down in recent quarters with tougher competition from their number one competitor Hewlett-Packard. Dell which sells directly to customers through the internet and via phone has had complaints of their poor after-sale performance. In the early 90's Dell's percentage growth was much higher and analysts wonder if Dell can once again reach these numbers.An analyst with Cross Research says, "Dell is facing a lot of challenges. HP is just reinvigorated, which is one of their biggest problems. Their competitor is back."Dell shares ended down 68 cents, or 3 percent, at $21.70, more than the Merrill Lynch Tech 100 index's (^MLO - news) 1.6 percent fall.

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Dell anticipated a reduction of approximately 70 percent per product line in the number of promotions for U.S. consumers and small businesses. Promotions connected to a single product line would decline by 80 percent.Reductions will take affect in the next 12 to 18 months, starting with the Inspiron notebook computers and Dell monitors.Moors and Cabot analyst Cindy Shaw said, "People hate rebates" and she believes this is a positive move for Dell.Some analysts thought Dell would introduce price cuts to contend with competitors Hewlett-Packard and Acer Inc. They continue to diminish Dell's long-established price advantage thanks to cheaper components and more competent manufacturing.

 


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