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Technology Stocks : Compaq
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To: Roads End who wrote (21288)3/10/1998 8:18:00 PM
From: FR1  Read Replies (1) of 97611
 
I read the Lehman report too. Crazy comments like:

"8.Lehman Bro.thinks DELL would need to respond to some of CPQ's pricing cuts, but as approx.40% of DELL's revenues are derived from medium and large US corps. DELL would largely be insulated from the majority of the pricing pressure."

What is this man talking about? IBM just declared war on servers and CPQ is going to respond.

I get ads from DELL all the time and one thing I notice is that there are NO seriously sub $1K computers. Dell has been cherry picking the high end desktop market because that is where all the fat is. What are they going to do when IBM and CPQ declare war on all computers? This is going to happen this year.

The argument against (and for) DELL has always been that DELL is just a man with a screwdriver. No R&D, no overhead and no products they research and own. They stay ahead by moving from Round Rock Texas to Malaysia (a fact praised by Lehman Bro). Let's see .... Africa is next and then Borneo which will be followed by the Amazon head hunters that work for fish (maybe not! - you don't really save that much because the Borneo tribes speak Pidgin english)....there is a limit to the low end overhead game for DELL.

If IBM and CPQ offer computers just like DELLs only at significantly lower prices and with better staff backing them up (ask DELL what the word UNIX means), it starts to get hot under the collar for DELL. In short, IBM and CPQ have to ability to do what DELL does even better than DELL but it is not vice-versa.

Let's see... IBM has high end chips, CPQ has Alpha and DELL has.....a screwdriver.
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