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Technology Stocks : Dell Technologies Inc.

DELL 128.08

+4.5%

2:19 PM EST

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To: JRI who wrote (149091)	12/11/1999 8:21:00 PM
From: Meathead	Read Replies (2) of 176387

Hello JRI. Rudedog's concerns are legitimate and have a great deal to do with why the stock is weak. A lot of people don't believe Dell's growth plans will pan out because the market is, and will continue to shift away from Dell's core competency of selling hardware. The thinking is that there will be an excremental decay in ASP's that will catch Dell off guard. Dell's insistence on being a pure PC company will ultimately strangle them if they don't move away from the PC ala CPQ and HP. This could happen if management is dead wrong in their vision for growth. However, I've yet to see a good numerical analysis covering plausible scenarios. For every action there is a reaction. If your competitors are running like mad to get out of the business that you're in, should you join them in the exodous? That depends on why they're retreating. If it's because the future of the business is basically doomed in terms of growth and profit no matter how efficient you are, then yes. But, if it's because they're throwing in the towel and admitting defeat because they aren't structured to compete profitably then you stay the course and take their market share. I believe both of these scenarios are playing out right now. The PC/server/storage market isn't doomed but it's future doesn't seem as bright to investors as the markets which range from Pokemon pagers to ecommerce consulting, and, Dell is very difficult to compete with in the hardware space but not impossible. But again, as ASP's continue to drop, volumes in the PC/server/storage space are going to increase at an incredible rate over the next several years as the world wires up so it's going to have a lot of profit potential. As for Dell's weak product line. I don't think it's terribly weak. Corporate offerings are still strong but RAMBUS is a fiasco and may cause more pain. Reliance on Intel still a concern but RCC made it's way into the server line this time around. The consumer product offerings are what pale in comparison to their competitors at the moment. But remember, Dell is still new in this space. Let's see where they are next christmas. If they still lag by then they can forget any significant market share... but I wouldn't bet on it. Just saw the first WebPC commercial. It was pretty good. A little late for the xmas buying season however. I am somewhat critical of the product itself and the slogan "Born to Web" is pretty lame. We'll see... MEATHEAD

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