Doing Dell One Better

System builders are finding it more difficult to compete on the low end with the likes of vendors such as Dell. System builders can counter these problems by focusing on how they build, bundle and market their low-end systems.

The CRN Test Center focused on what Dell’s low-end offerings lack to see what it takes to successfully build a custom system. Dell’s razor-thin margins, economy of scale and proprietary technology have drained almost all of the profit out of the low end.

Dell’s ultra low-end system—the Dimension 1100, which advertises for $299 after a $50 rebate—is short on features. Although the unit is marketed as a small-business solution, buyers will find only Windows XP Home Edition installed—Windows XP Pro, which is required for networking, is an additional $149. The processor is an Intel Celeron D Processor 325 (2.53GHz, 533 FSB), which offers adequate performance for little more than word processing and Web browsing. A proprietary Dell motherboard also is used. An on-board 10/100 Ethernet card offers network connectivity and 256 Mbytes of 400MHz RAM (actual speed is 333MHz). An 80-Gbyte ATA hard drive is included, along with a 48x CD-RW drive, a basic keyboard, a mouse and a 17-inch CRT.

A Not-So-Low-End PC >> AMD Athlon 64 3000 processor/motherboard: $178 >>  Leadtek GeForce 6200 video card: $49 >>  Maxtor Serial ATA-150 120-Gbyte hard drive: $49 >>  LG CD-RW/16x DVD-ROM combo drive: $29 >>  Micro Innovations keyboard/mouse: $9.99 >>  ATX midtower case/USB and audio ports/400-Watt power supply: $27.99 >>  Microsoft Windows XP Media Center Edition 2005 OEM: $109.99 >>  Sabrent Webcam: $17

To surpass Dell, system builders need to focus on the processor, video, RAM, hard drive and CD-RW drive. Most system builders can put together a basic system using an AMD Athlon or Intel Pentium 4 processor for a few dollars more than the Dell system and include some basic must-haves, such as an industry-standard motherboard, a separate video card, 512 Mbytes of RAM, a DVD-compatible CD-RW drive, a SATA-compatible hard drive, a Gigabit Ethernet port and other enhancements to ensure the system will be ready for the next generation of operating systems, such as Microsoft Windows Vista.

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