<<In fact, the company topped out in 1987 I believe>>
Reference was to stock price topping out, not the company's business.
As for the rest of the arguments, perhaps my terminology is incorrect. I was referring to the practice in the mid-80s of DEC selling systems to small businesses for $30,000 or so to do some pretty basic stuff. Later, RISC-based PCs (I use the term PC loosely) costing slightly under or over $10,000 began to make inroads into this business. I can think of at least two instances in which that occurred. Perhaps my data points aren't enough, but there were enough research reports done at that time pointing out the risks to DEC beginning in the early 90s.
Without having to dredge up old reports, I'll concede most of what you say about the expensive systems. However, the basic concept is still instructive. History is replete with examples of high-priced technology being attacked by lesser costing technology. At first, the low-priced technology can only nibble at the lower end jobs being performed by the more expensive technology. Later, as the low cost technology improves and costs decline further, more of the business is taken away from the higher cost technology.
That is one of the issues confronting DELL. The sub-$1,000 systems are starting to nibble away. One tech consultant just put in over 20 Emachines with NICs, where previously DELLs would have been used. It is very difficult to hold margins when the growth is coming from lower-priced systems on razor-thin margins. DELL knows that and is attempting to diversify its revenue base to find some higher margin businesses and products to offset the lower margins it will have fighting the sub-$1,000 (and sub whatever) battles.
As for DEC's minicomputer margins eroding, I'll have to go with the research reports from the decade 86-95. If you have some SEC filing data that contradicts this (e.g., Management Discussion), please let me know. |
