(expected in early 2007), putting the next upgrade cycle around 2008. Heavily dependent on PCs, Dell had to slash prices to boost sales volumes, while demanding deep cuts from suppliers.

Dell had long stuck by its direct sales model. Consumers had become the main drivers of PC sales in recent years, yet there had a decline in consumers purchasing PCs through the Web or on the phone, as increasing numbers were visiting consumer electronics retail stores to try out the devices first. Dell's rivals in the PC industry, HP, Gateway and Acer,