Dell Considering Addition of Routers

Dell Computer Corp., which began competing with Cisco Systems Inc. last year by selling computer-network switches, is considering a bid to move deeper into Cisco’s territory by adding routers and other network gear.

Dell, the No. 2 personal-computer maker, gets wider profit margins from network equipment than computers, said Kim Crawford, vice president for the networking business. Dell probably would sell low-end routers to small and mid-size offices, a $3-billion market, rather than higher-capacity gear used in large telecommunications networks, analysts said.

Texas-based Dell would have to undercut Cisco routers, which connect computers to the Internet, that sell for less than $650, Gartner Group analyst Lawrence Orans said. Cisco “should be worried about Dell,” he said. “Cisco continues to be premium priced.”

Dell shares fell 32 cents to $25.91; Cisco declined 48 cents to $14.99. Both trade on Nasdaq.