Not much AMAT specific news lately, so this will have to do:
Dell sees little effect from Taiwan quake
AUSTIN, Texas (Reuters) - Dell Computer Corp. chairman Michael Dell said Thursday the company's financial performance should not be affected by an earthquake that knocked out industrial production in Taiwan last month.
He said Taiwanese computer parts plants damaged in the September 21 temblor quickly resumed production and Dell, the world's second largest personal computer seller, had used its market muscle to assure a steady stream of computer chips.
''In terms of Q3 (third quarter) specifically, I think we're going to do okay...all of the things we've seen so far seem to be addressable through supplier leverage,'' Dell said at a meeting with analysts.
''We're going to squeeze out the little guys, and I think we're going to get the parts we need,'' he said. ''I feel very, very good about the long-term environment and I don't think the short-term environment is going to be one that has massive obstruction to our business.''
Dell's stock had fallen on fears that computer parts would be in short supply after the earthquake, which killed 2,200 people. Dell said the company was being more affected by an industry-wide shortage of screens for notebook computers than by the Taiwan tragedy.
Generally, Dell painted a positive picture for analysts, saying the company had targeted four business segments -- computer services, global expansion, home and small business consumers and enterprise systems -- each of which had the potential to add $10 billion in revenues.
''It's not hard to see how we could grow from $26 billion (in revenues) this year to $50 (billion) or $70 billion any number of years out. We see huge opportunities,'' he said.
Dell reported revenues of $18.2 billion for the year ended January 1999. Analysts had estimated the company would generate $26 billion in revenues for the current fiscal year.
Dell said the company is just starting to see the economic payoff from its use of the Internet, and over time, the Internet could help Dell Computer cut its costs by up to 50 percent.
He said Dell had recently joined its competitors in offering $400 rebates to computer buyers who also sign up for a three-year subscription, at $21.95 a month, to Dell.Net, the company's Internet service provider.
Previously, Dell had resisted giving rebates, but Michael Dell said they had ''clearly become a market factor'' the company could no longer ignore.
Paul Bell, head of Dell's consumer segment, told analysts that the company gets improved margins from the rebates.
''Margins are actually better for us...because $21.95 a month is way over cost for an ISP (Internet Service Provider) these days. The cost of (an ISP) has come down tremendously,'' he said.
Bell said Dell offers its rebate customers the opportunity to later upgrade to broad-bandwidth, high-speed Internet service when it becomes available.
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