"price war"
It is a lot easier to talk about war than to fight one and easier to fight than win. IMHO, if CPQ, IBM, or HWP lower prices and their basic costs are higher than DELL's, everyone will get hurt, but DELL will emerge stronger. I don't see that happening. I believe CPQ, IBM, and HWP will work on their cost factors, increase their sales forces, increase their advertising, and sell "customer support." I think DELL knows that too, and if they are as smart as I think they are, they are working on a way to nutralize the "customer support" issue, possibly by developing a very low cost customer support model. Don't you just love the dynamics in this industry? Costs coming down, performance improving, and service improving!
I do believe you will see prices fall significantly, but that is because of the relentless drop in component prices. Have you checked out the cost of hard drives, memory, CDROM drives, and monitors lately? Just because prices fall, it doesn't mean a price war. And it doesn't mean margins will drop.
I believe the are many reasons why DELL has been going up so rapidly. I don't know what others' reasons for buying are. I've got my own. |
