Please notice the distinctions between the two companies: DELL is a marketing company that pioneered direct selling, especially over the net. It has been increasing PC and server market share rapidly, but its gross margins are very low compared to tech companies (which DELL is not!). Any blip, such as chip shortages can blow a quarter. DELL, however, is doing fine, and will continue to take market share in PC's, servers, and storage, and will become as major a factor in the rest of the world (such as China and Brazil) as in the US. Because it is seriously overpriced, its stock will continue to be highly volatile, but its world market share will continue to grow rapidly as they build more and more plants abroad. DELL really knows how to build plants and computers -- look at their Nashville operations.
QCOM is another seriously over-priced stock, but has rapidly evolved into a IP company licensing CDMA and reinvesting into improving its technology for which it charges very high even extortionate licensing fees. It has sold off its phone manufacturing (to Kyocera) and station manufacturing (to ERICY). Recent entries into China and growing world market share improve long-term prospects. It is nowhere close to saturating its market and has clearly dominate wireless technology. |
