May 24 (Bloomberg) -- Dell Inc., which became the world's No. 1 maker of personal computers by cutting out retailers and selling direct, will open two stores this year where consumers can touch and feel the machines before buying.

Outlets in Dallas and in West Nyack, New York, will measure 3,000 square feet and serve to showcase Dell's products and ease the task of ordering online, spokesman Venancio Figueroa said. Machines won't be available to carry out.

The stores are aimed at wooing customers who prefer to see PCs before they buy or who want a salesperson to explain the differences between models, Dell said. The move comes after Hewlett-Packard Co. stole market share from Dell last quarter by catering to customers able to pick up low-cost PCs, notebooks in particular, immediately from their local retailer.

``There's a lot of Dell customers who prefer to buy Dell products online, sight unseen,'' Figueroa said yesterday. ``They're comfortable with the brand, the product, the value we bring. At the same time, some people need to see the products.''

The stores extend a pilot program with kiosks that started in 2002. Dell has about 160 kiosks in malls and airports around the U.S., and placed them in five Sears, Roebuck & Co. stores in early 2003. Dell also sold a limited number of PCs through Costco Wholesale Corp. stores last year, Figueroa said.

The outlet stores won't offer hands-on technical support, in contrast to Apple Computer Inc.'s 147 retail locations. Cupertino, California-based Apple offers a so-called Genius Bar where customers can get products fixed and ask questions. Apple also sells its Macintosh computers and iPod music players in its stores.

Sales Growth

The retail expansion underscores the pressure on Chief Executive Officer Kevin Rollins to reignite sales growth after losing market share to Palo Alto, California-based Hewlett- Packard. Round Rock, Texas-based Dell will cut $3 billion in costs this fiscal year to help boost profit margins and spend to improve customer service, Rollins said last week.

First-quarter profit reported last week missed a February forecast and sales were at the low end of expectations after the company cut prices to spur orders. The shares, which fell 29 cents yesterday to $24.09 in Nasdaq Stock Market composite trading, are down 40 percent in the past year.

Consumers, which account for just 15 percent of Dell's earnings, have accounted for most of the growth in the PC market in the past year. With notebooks, customers ``often want to touch and feel products before they buy them,'' said Bill Fearnley Jr., an analyst with FTN Midwest Securities Corp in Boston. ``This is a trend that worked against Dell in the consumer market.''

Stores, Kiosks

Construction on the Dallas store will start this month, with work on the New York location beginning in summer, Figueroa said. Both stores will be in high-traffic shopping malls.

The stores will be 25 times bigger than kiosks, called Dell Direct Stores. The 10-feet by 12-feet stands typically are staffed by two to three salespeople who answer questions and then help consumers order online, Figueroa said.

``They're trying to remain true to the model and the model says inventory-less,'' said Roger Kay, president of Endpoint Technologies Associates in Wayland, Massachusetts.

In the calendar first quarter, Dell's worldwide PC market share dropped to 18.1 percent in from 18.6 percent a year earlier, according to market researcher IDC of Framingham, Massachusetts. Hewlett-Packard, under new CEO Mark Hurd, boosted its share to 16.4 percent from 15.1 percent a year earlier.

Retail Network

Hewlett-Packard relies on 140,000 retailers worldwide to help sell its products. Analysts estimate that 70 percent of the company's PC sales come through partners. The company said retailers sometimes sell popular notebooks at deep discounts and below cost, to build store traffic.

``For years, we heard about direct being the way to go, they're going to kick us in the butt,'' Ted Clark, general manager of Hewlett-Packard's global notebook business, said in a May 9 interview. ``The retail network is a competitive advantage for H-P. You can't beat retail today.''

Dell's new stores may frustrate some customers seeking out printer suppliers, monitors, televisions and customer support, Fearnley said.

Store sales staff will likely refer technical questions to online and telephone support, just as staffers at the kiosks do today, Figueroa said.

The outlet stores will add to operating costs, further weighing on profit margins as Dell slices prices, Fearnley said in a May 22 report. Dell declined to say how much the stores will cost to build and run.

``Dell is experimenting with distribution because clearly they need to do something,'' Kay said. ``This is getting Dell in front of high-traffic areas and that's good. The bad news is that they don't have any inventory and so there's nothing to sell.''