Hi dave s; Not much action on this thread. You can
certainly date Dell's decline to the moment when prices
quit rising. Here's some quotes from my posts over the
years on this thread:
Saturday, Aug 29 1998
DELL's big profit advantage is in a regime of quick falling
component prices. The advantage they posses is that of having
small inventory, and therefore small losses in inventory value.
I expect this regime to last far longer and prices to fall far
deeper than most people. For the short term, this is bullish
for DELL. But when the regime stabilizes, DELL will be at a
disadvantage compared to those who inventory in bulk.
#reply-5688320
September 26, 1998
Things are peachy right now. But, eventually, this cycle,
like all the previous cycles, will turn and disk drive glut
will turn into a disk drive famine. When that time arrives,
the vertically integrated makers will begin to look pretty
smart. The same applies to the other parts of a computer.
I've been in the hardware business for a long enough time to
see both the good times and the bad times for IC makers. When
the good times roll, you cannot buy newer parts at any price,
in even small quantities. Someday, those times will return,
and IBM and MUEI, will be making as many boxes as they can
turn out, while their competitors are limited by "allocation"
on those memory chips.
October 24, 1998
The inventory reduction that DELL has, does reduce costs
in a time of quickly changing component prices, but I
predict that component prices will stabilize at very low
levels. The low prices will reduce the value of inventory,
thus reducing the carrying costs, and the stable prices
will eliminate the loss in value due to price
reductions. #reply-6145198
by the way, I also predicted AMD's resurgence in server market:
February 27, 1999
Within 5 years I expect to see AMD (or very cheap Intel)
chips take over in the server market, as well as the low
end. #reply-8068504
-- Carl |
