Hewlett-Packard says that it expects revenue and earnings will come in higher than previously expected when it announces quarterly earnings May 16. That's bad news for Dell and other competitors in
the personal computer business.
Analyst Brent Bracelin of Pacific Crest Securities in Portland, Oregon, says that the star of HP's lineup has been the HP and Compaq-branded PCs sold
through retailers such as Best Buy and Circuit City Stores. The results have challenged Dell's business model of selling directly to consumers.
Dell has recently been viewed as
restructuring its approach. One sign of new thinking was a memo leaked in April wherein CEO and founder Michael Dell expressed an interest in "reinventing how we address the needs of our consumers
around the world," and said that direct sales were "not a religion." But speculation that Dell might embrace its own retail strategy--or even make an acquisition such as Radio Shack--have not yet led
to any specific changes.
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