chic -
as you pointed out, Intel has had lots of supply problems, and the high end chips lead the race. Still, several folks I know have ordered 800 and 866 machines from DELL and gotten delivery in 2 weeks or less. DELL would obviously like to leave no buyer unsold, so they would like to move prospective customers to the products they have in better supply.
There is no question that DELL got hit hard in 1999 by their dependence on Intel. Not only coppermine shortages, but also the 820 and 840 chipset problems, the RAMBUS problems, and Intel's problems with their 8-way boards... that's just the most visible part of the impact.
But the difference in development costs between the DELL - Intel model (representing something like $250M R&D to DELL) and the CPQ model (close to $3B) is staggering. CPQ's R&D alone amounts to about $1.40 in EPS, more than they anticipate making in 2000...
Now of course CPQ's R&D also covers development of Alpha chips and technology, engineering of advanced products like Wildfire, and the like - they don't break out investment in PCs but it is probably a lot closer to 4% than 8%, since the enterprise numbers are more like 12% on an industry basis. Still, DELL is probably money ahead, even with all the Intel problems.
If DELL built a strong consumer business, there might be more pressure to go to an AMD chip. DELL could probably do that if the used a completely outsourced model (i.e. farm out development and manufacturing of the consumer boxes) - and that also would fit the consumer distribution model, and would be consistent with DELL's approach on WebPC, which is farmed out. Time will tell... but so far, DELL has shown only moderate interest in the consumer market, and WebPCis a small toe in the water. |
