Wal-Mart wmt hopes to reboot the retail market for computers Sunday by selling beefy laptops for less than you'd pay for a pint-size netbook.
The retail giant is stepping up itscampaign to become a more prominent PC retailer, a move that could accelerate a broader trend toward lower computer prices.
"Other retailers will be watching closely to see if they need to respond by dropping prices for comparable products," says David Daoud, IDC tech industry researcher. "It could potentially trigger a price war."
Wal-Mart recently renovated PC displays in 1,200 of its 3,600 stores to make them easier to navigate — more like Best Buy bby than, well, Wal-Mart. It plans to refurbish more stores, broaden product selection and do a series of rock-bottom-pricing promotions.
"We believe we can move the needle for us as a laptop destination," says Gary Severson, Wal-Mart's senior vice president for entertainment.
For example, it will sell a Hewlett-Packard-made laptop, running Windows Vista with 3 gigabytes of memory and a 160-gigabyte hard drive, for just $298. Or for $548, you can pick up an Acer-made Vista laptop with an eight-hour battery, 3 gigabytes of memory and a 320-gigabyte hard drive.
Slumping sales at electronics and office-supply chains give Wal-Mart — which has prospered as the recession made consumers more price sensitive — a ripe opportunity.
"They're looking for growth opportunities wherever they can find them," NPD analyst Stephen Baker says. "Attempting to increase their share of consumer electronics makes sense."
PC sales have not declined quite as steeply as experts projected. Consumers are gobbling up low-end laptops and netbooks, although businesses still aren't buying many new computers.
"At the moment, price competition and extreme promotions are spurring the market," says Jay Chou, PC industry analyst at IDC.
"We're seeing the average guy on the street holding up PC sales pretty well."
The challenge for Wal-Mart is to attract more than finicky bargain hunters.
A recent IDC survey of 1,000 consumers shows PC buyers much prefer in-store and online shopping at computer and electronics stores, or buying directly from the PC manufacturer. Knowledgeable sales staffs and follow-up customer service are major considerations.
Even Best Buy, the leading electronics retailer, has struggled to shape a satisfactory in-store shopping experience for PC buyers, Baker says.
"Wal-Mart is a big supermarket for everything," Daoud says. "I'm skeptical that it is going to be able to sustain this over time, because you need a totally different infrastructure."