Dell may sell manufacturing business at its own peril

Filed under: Consumer experience, Competitive strategy, Apple Inc (AAPL), Dell (DELL), Hewlett-Packard (HPQ)

Dell (NASDAQ: DELL) wants out of the business of owning factories that make PCs. According to The Wall Street Journal, "Dell has approached contract computer manufacturers with offers to sell the plants." Owning the manufacturing facilities cuts Dell's margins.

Analysts believe that in the current environment where laptops have taken the lead in PC market share owning facilities that pump out massive numbers desktops is no longer practical.

Dell could be making a huge mistake in the name of short-term profitability. The company is particularly good at delivering "custom-made" computers quickly. Dell customers can configure the PCs with a large number of special features.

More importantly, Dell will lose some level of quality control if its manufacturing is owned