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Politics : Ask Michael Burke

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To: Simba who wrote (75615)	2/11/2000 6:07:00 AM
From: Earlie	Read Replies (2) of 132070

Simba: When lousy numbers have to be digested by the sheep, a good sized lump of sugar helps the bad-tasting medicine go down. Dell and Meridith are masters of this technique. Neither of those two bandits wants to admit the truth about the vaunted PC sector, which is that it is now fully commoditized. The growth years are at an end, at least until some new applications emerge. So now they try to focus worried investors' eyes on servers and storage devices. A neat trick. In fact, there is significant growth left in the server market from a units point of view, but what they don't tell the sheep is that prices are in free fall and margins have been crushed. The problem is that all the PC producers moved into servers two to three years ago to try to hold up their overall margins. Excess capacity equals price wars. Dell's move into peripherals is another cute move. Sure the revenues will move up, but the margins in that game are murderous now. Best, Earlie

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