Dell's Big Wal-Mart Adventure

In the report, Raymond James' analyst Brian Alexander said a look at almost three dozen Wal-Marts carrying Dell computers shows strong results barely a month into the availability of Dell PCs at the mega retailer's locations.

"Checks suggest strong sell-through, with most stores sold out of the higher end model," the report stated. "Based on current trends, we believe Dell is on track to sell 250,000 to 300,000 units per quarter, which translates to $100 million to $150 million in incremental revenue per quarter, or nearly 1 percent of Dell revenue."

Dell shares shelf space at Wal-Mart with PCs from Hewlett-Packard, Acer, Toshiba and eMachines, among others. Dell's Wal-Mart models include a Dimension E521 without a display, for $498, and a higher-end unit with an LCD monitor for $698. Wal-Mart issued a statement Thursday saying sales of Dell PCs gave its computer lineup a boost during its most recent five-week period.

Alexander, in the report, wrote that while the impact to Dell's earnings per share in the near term would be negligible, "additional retail relationships should add to this run rate."

Dell returned to the retail segment on June 10, after an absence from retail stores of about 15 years, as part of the company's broader turnaround strategy. In addition to an aggressive retail strategy, the company is working on growing its sales through the North American commercial reseller channel. Chairman and CEO Michael Dell said Tuesday that the company's new Vostro line of PCs for small and mid-sized business would ship both direct and through the channel.

Some resellers who work with Dell have been generally supportive of the company's move to ship systems through Wal-Mart, while some have also questioned whether or not it would create an additional conflict and pricing pressure. Michael Alifano, owner and operator of Alifano Technologies, a Half Moon Bay, Calif.-based solution provider and Dell channel partner, said Dell's success at Wal-Mart would not be at odds with his company's business or strategy.

"We make money off the service," Alifano said. "We don't recommend many PCs between $300 and $500 because you can get so much more for a little extra." Alifano said his company has been a Dell solution provider for several years, and that the company has been "the best" at developing the partnership. He said Dell recently hosted a representative of his company in a technical summit for solution providers, provided an in-person PowerEdge tutorial for his company and has rolled out a web portal for solution providers to provide logistics support, including streamlined parts ordering.

Dell executives say they will also launch a deal registration and certification program for resellers by the end of the year, and continue to expand their retail presence worldwide.