New Loss Leader For Wal-Mart?

By on November 1, 2005

From the “You Get What You Pay For” department, C-Net is reporting that Wal-Mart may be selling HP Pavillion ze2308wm laptops this Christmas season for the low-low price of $398. Wal-mart pulled a similar stunt last year, but since then I haven’t heard any rave reviews about the quality of the hardware.

Given the fact that HP is selling other ze2000 series laptops for closer to $700 you’ve gotta believe they’re losing on every sale. How can this be good for HP or Wal-Mart? Wal-Mart can at least hope that customers will stick a jar of pickles in the cart alongside the new laptop, but where is the benefit for HP?

I like finding a good deal as much as the next guy (I’m cheap) but this sort of thing really messes with economic reality. Granted, computers have steadily become faster & cheaper — and will continue getting faster & cheaper — but dumping cut-rate hardware at prices below the breakeven point only serves to eliminate profits for everyone in the supply chain, not to mention adding to the already growing problem of what to do with all the obsolete computers.

My vote is for letting Moore’s Law and the laws of supply & demand do the work.

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  1. hp sets a wholesale price that they sell the notebooks to walmart for. the only one taking a loss would be walmart.

  2. Just for the record, it’s now almost 6 months later…and my $400 laptop, is doing extremely well. Not one problem, performance for what I use it for (MS Word, TONS of Internet surfing, burning MP3s) is excellent for the cost.

    This laptop actually sold for $650.00 in other states, because they couldn’t go any lower due to state regulations (see Wisconsin).

    I previously had an HP desktop (another $500 job from Walmart), had it for well over a year, after increasing memory it ran like a charm. B4 that I spent 1100.00 on a new Toshiba..the crap lasted barely 2 years; money down the drain.

    I got a wireless laptop, with CD burner for $400, and spent $60 on an extended warranty at Walmart.

    Now I have Verizon broadband via aircard in Chicago, travel every other weekend, and it does just swell. Thanks HP!

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