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Quick Hits: Dell's MP3 Player to Miss Holiday Shopping Season

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Brief scrutiny of today's headlines.

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In an effort to boost holiday sales, Dell (DELL) won't launch its new digital music player before Christmas.

But the company has released 2 consumer notebooks, the best-selling segment of the consumer market. Still, Dell lags behind its rivals.

Since September, rival Hewlett-Packard (HPQ) has released a pair of entertainment-focused laptops, an inexpensive mini-notebook billed as a "netbook," and a notebook computer designed for Best Buy (BBY) stores.

Dell hopes to increase market share by offering stylish laptops, including models that come in red, blue, "quartz pink" and mica-brushed metal. It also released a larger high-end version of an all-in-one desktop.

In mid-2008, Dell held about 9.2% of global PC sales, compared with HP's leading 18.7% and Acer's 12.3%, the Wall Street Journal reports.

However, Dell intends to launch a half-dozen laptops and desktops before the end of the year - a move that will require hefty marketing expenditures.

Earlier, Dell tested a prototype of a mini MP3 player based on entertainment software from Zing, a company Dell purchased in 2007. The new device was expected to be released this fall, but the company has decided to hold off, perhaps indefinitely, to develop the software.

Dell says fall sales have been strong and notes that 3 of its laptops are among the top 10 best retail sellers for the third week of October.

CEO Michael Dell said he would increase consumer sales by creating "product lust." Dell is revamping the company, and finished a company-wide layoff of about 9,000 workers in October.

Historically, Dell has thrived by selling large volumes of PCs to businesses, but appears to have trouble pegging new consumer products to peak selling periods. Holiday sales, for example, can generate 30% to 50% of annual PC revenue. The company planned to release a new notebook early last summer, but production was delayed due to keyboard problems, and the company missed the back-to-school selling season.

Three years ago, Dell missed earnings estimates, quality plunged, customer service took a pounding and the once-mighty company was clearly in trouble. It looks like a long road back to rebuilding market share.

No positions in stocks mentioned.
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