Wal-Mart Reportedly Inks Notebook Deal With Asian OEM

Elitegroup, which started delivering the laptops in May, is expected to ship from 40,000 to 50,000 notebooks to Wal-Mart each month through the rest of the year, The Taiwan Economic News reported last week. Wal-Mart declined comment.

CRN had reported last year that Wal-Mart was in discussions with Taiwan-based notebook PC makers to add so-called WhiteBooks to its product line-up.

Wal-Mart is expected to offer a notebook for either $599 or $699 under a house brand other than Wal-Mart. Such a product could affect sales of low-end computers sold by manufacturers Dell Inc., Hewlett-Packard Co. and Toshiba Corp., Sam Bhavnani, analyst for market researcher Current Analysis said Friday.

In addition, retailers Best Buy, Circuit City, CompUSA, Staples, Office Depot, Office Max and Costco could also suffer.

"What Wal-Mart has is reach," Bhavnani said. "They're a multi-billion-dollar company that reaches a large portion of the country."

Indeed, with 2,500 stores and 456 Sam's warehouse clubs in the U.S. alone, Wal-Mart has five times the number of stores as Best Buy or Circuit City, Bhavnani said. As another indicator of its size, Wal-Mart has more than $250 billion in sales worldwide, compared with Dell's $41 billion and HP's $73 billion.

Wal-Mart, however, is not the first to offer house-brand computers. CompUSA and Best Buy launched similar products, which failed to attract enough buyers. Both companies discontinued the products, Bhavnani said.

While only delivering 120,000 notebooks in the first half of this year, Elitegroup now expects to ship 600,000 units this year because of the Wal-Mart contract, the Taiwanese newspaper said.

Wal-Mart's latest push into the notebook market is not expected to affect sales to businesses or sales of high-end computers and laptops, Bhavnani said.