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Technology Stocks : DELL - news, info and analysis

DELL 160.97

-1.6%

Oct 30 3:59 PM EDT

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To: MRE who wrote (1)	8/5/1997 1:09:00 PM
From: Jack T. Pearson	of 36

Thanks for the new thread and the interesting article. I was thinking last night about the fact that a few companies are pulling ahead of the pack in personal computers. I wish I knew more about how this happened in other industries like automobiles, television, etc. I expect that consolidation will not be a significant growth mechanism in personal computers. I suspect the costs of integrating a different company location and culture will be higher than the costs of internal expansion. What I don't understand is how Compaq can reduce costs by 16% by building to order for their retailers. I can't imagine how building to order reduces production costs. I suspect what it really reduces is inventory costs and that Compaq will be able to pass component cost reductions into the channel faster. IMHO, Dell is far ahead of everyone in inventory control. Compaq claims to have the lowest production costs. I suspect that Compaq production costs are a benchmark for Dell. One thing I am sure of, the competition between Dell and Compaq will benefit both companies at the expense of others. jack

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