For Sale Soon: A Wal-Mart Notebook?

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Wal-Mart Stores has approached Taiwanese notebook manufacturer Arima Computer to discuss placing an order for notebook PCs, but no deal has yet been reached, according to an Arima executive.

"The order is not firm yet," says Kenneth Tu, a sales executive at Arima. "At a certain level we have had some contact, but it is not at that stage."

Wal-Mart began selling notebook PCs at stores in select markets during mid-2003, having previously sold notebooks on its Web site, according to the market research firm ARS. Going directly to a contract notebook manufacturer, such as Arima or a rival manufacturer like Quanta, would allow Wal-Mart to begin selling PCs under its own brand name.

Shake Up the Market?

The entry of Wal-Mart into the low-end notebook PC business could have a significant impact on this segment of the PC market, say analysts at ARS. With more than 2500 stores in the U.S., Wal-Mart has the capability to sell large volumes of notebooks, and this could affect the sales of low-end notebooks by competing vendors, including Hewlett-Packard, Dell, and Toshiba, the analysts' report says.

ARS expects Wal-Mart would use an initial order for notebook PCs to test consumer demand. The market research firm predicts the retailer will offer notebooks with a 15-inch screen priced at less than $800. The notebooks could be based on an Athlon XP processor from Advanced Micro Devices or a Celeron or Pentium 4 processor from Intel, the report says.

"Wal-Mart's financial muscle will enable it to secure very competitive pricing from the contract manufacturers," the ARS analysis concludes.

Other Ventures

Reports that Wal-Mart had placed an order with Arima for 100,000 notebook PCs first surfaced in the Taiwanese press earlier this week. The reports said Wal-Mart is expected to begin selling the notebooks in the first quarter of 2004. However, Tu described those reports, which cited unnamed industry sources, as "not true."

Wal-Mart broke new ground by offering both stand-alone copies of the LindowsOS and PCs preloaded with Lindows. However, Wal-Mart has also offered major-brand PCs, notably an entry-level budget PC from Hewlett-Packard several years ago.

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