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Technology Stocks : Ascend Communications (ASND)

ASND 201.40

+2.3%

Dec 10 3:59 PM EST

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To: Glenn D. Rudolph who wrote (38239)	3/7/1998 1:02:00 PM
From: gbh	Read Replies (1) of 61433

Glenn, Dell may be living in a fantasy world. As Compaq cuts prices to the bone to move boxes through stuffed channels, IBM, HP and NEC/PB will be forced to do the same or risk being forced into the same heavy inventory situation as CPQ in the retail channel. Hence, its likely an all out price war could ensue for the next few months (although I don't think it will last much longer than that). Corporate accounts (traditional Dell customers) and home users considering Dell will no longer have a price advantage going direct. So its conceivable you will see a 1-2 month lag before Dell is hit with the same problems. Although Dell isn't currently marketing sub $1k systems, they sell heavily at the $1.5K level. As the big retail guys try to move inventory, normal $1.5k machines will be discounted 10-20%, making them very attractive to small and medium businesses going through upgrades cycles. It seems unlikely anyone will be spared. Just some may see the problem a little later than others.

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