Business Insider reported on Friday, citing an internal list of upcoming price changes sent to company staff on December 9, that the price hikes will impact Dell’s commercial business.
- Starting Dec. 17, Dell Pro and Pro Max notebooks and desktops with 32GB of memory will cost between $130 and $230 more, Business Insider said.
- According to a Dell employee, the percentage increase would be “between 10% and 30%” depending on the contract.
- Dell urged its sales teams to engage with top accounts in the coming weeks ahead of the price hike.
Dell Technologies Inc (DELL) is reportedly set to hike prices across its commercial product lines starting December 17 and has been prepping its sales staff for the days ahead as the higher price points make the devices harder to sell.
Business Insider reported on Friday, citing an internal list of upcoming price changes sent to company staff on December 9, that the price hikes will impact Dell’s commercial business or its sales to corporations instead of individual consumers. The price hike comes as shortage of memory and storage chips across the industry drives up costs, the report said.
Shares of the company fell 4.5% on Friday at the time of writing.
Price Hikes
Starting Dec. 17, Dell Pro and Pro Max notebooks and desktops with 32GB of memory will cost between $130 and $230 more, Business Insider said. For 128 GB memory systems, the price is set to rise by between $520 and $765 per device.
According to a Dell employee, the percentage increase would be “between 10% and 30%” depending on the contract.
“It’s impacting everyone, and there’s no way around it currently, so customers will just have to pay more if they want the products,” the sales employee said, while adding that Dell is also absorbing some of the costs internally by limiting discounts that sales staff can offer, among other measures.
Dell also reportedly told its sellers in an email in late November to move decisively ahead of the price increases and highlighted that the price of contracts for DRAM and NAND chips has “already risen significantly this quarter.” The computer maker also flagged that its suppliers signalled further increases and allocation constraints and advised sales teams to engage with top accounts in the coming week, close deals, and plan significant opportunities and multi-quarter deals to protect the sales pipeline.
Expert Take
Last month, Morgan Stanley analyst Erik Woodring pointed to surging memory costs, especially in DRAM and NAND, as a major headwind for Dell’s profitability. He argued that Dell, being heavily exposed to memory-intensive hardware, could see its margins squeezed over the next 12 to 18 months.
Meanwhile, Dell COO Jeff Clarke highlighted pricing concerns earlier this year at a conference and said, “This is the most unprecedented mismatch in demand and supply that I’ve ever seen in the memory industry, which you’re seeing it correspondingly reflected in spot price.” Clarke also added that the company might have to extract the cost from its end consumers.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment around DELL stayed within the ‘bearish’ territory over the past 24 hours while message volume remained at ‘extremely low’ levels.
DELL stock gained 15% this year and by about 11% over the past 12 months.
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