This is easy to answer. If you wanted to establish a retail operation, would it be easier to buy an existing established operation and re-create it into a Dell store or to simply start from scratch? There are over 4000 RadioShack locations. Dell could simply buy the company and turn the locations into Dell stores somewhat like what Apple does with its stores. Instead of starting from scratch, Dell could remake Radioshack and directly compete against Apple with its stores.
worked great for gateway. not. unfortunately for dell apple sells computers to a few people who will pay twice what they are worth for the name and dell sells pcs that sell on price alone.
I think of the little town of Alton, Missouri. Pop 778, no jobs, large welfare population, but it has a damn Radio Shack!
Cramer is talking up RSH as a play on the digital TV conversion. I do think the volume you see otday probably coincides with the conversion, rather than buyout speculation. With that said, getting a Cramer endorsement is the crucible of death for any stock, and RSH is not immune. Short to 12 IMO.
Compete AGAINST APPLE, HA Dell had the right business model in the 90's, as we can see times have changed and so has that business model, however if Dell thinks of buying RSH just for the locations they should think twice in this economy. Go BACK to the days when Gateway had storefronts. I dont think that would work too well. Gateway tried this and totally failed at it, Now Sony has tried it and it seems to be pretty much a non event, they opened there 1st store in 2004. I have gone into a sony store only to think that the only reason why one was created was to put it in direct competition with the Apple store. SONY will not win with their storefront, if anything I believe they should close every one of them. I have passed these stores a few times only to see them TOTALLY EMPTY. Apple stores are CONSTANTLY PACKED, the day I go to an apple store and see it empty on a given weekend I will believe a depression has come to this economy, the store is a GOLDMINE. I read an article that each of those stores rack in $40 Million in Revenue a year, the big giant ones in NYC that are open 24/7 365 rack in close to $400 Million in revenue per year. No one can compete against apples business model, the company is different than any other tech company out there, I think they would have felt the competition by now if someone like DELL or HPQ started something unique and different. Dell is Dell and APPLE is APPLE. If dell believes they will capture more market share by buying up RSH and start selling pcs from these locations they have another thing coming. IT WILL NOT work.
Radio shack was selling Packard Bell computers many many years ago (15+ years), which later acquired by NEC, then later by Acer.
Apple is becoming more commoditized now, as the reduced pricing of the new gen iPhone should tell everyone. I am firmly in the camp that Apple is going to have to lower prices across the line, especially in a price driven consumer market, especially at a time when every competitor in the world is gunning for their product line, picking off one product after the other.