GV, re Kumar
i believe when Kumar gave his last significant warning with Dell around $15 and it dropped to $10, traders got a bad taste in their mouth for his warnings. i don't recall if he was right or not; Dell rebounded. as the article stated the other day - cash flow remains very important - a tool which many analysts still consider half-heartedly. so; let's assume sluggish pc growth in US&Europe. with 85%-90% of the world still not computing, at what point does the term "saturation" become meaningful? i don't think anyone disagrees with Kumar's analysis of the current situation - but to what extent his future predictions have been right - not so agreeable; the final analysis is Dell rebounded each time, after each of his warnings. it remains a strong company. what growth rate would be acceptable to the market to maintain a $60 twelve month price target? why was this not addressed? i still believe Dell will achieve a twelve month target of at least 30% growth, even with hiccups. do we hold Dell knowing the stronger half of the year is coming up (CPQ saw no weakness there), or do we trim based on short term?
Already, Ericsson states that China is its largest foreign market. Dell calls China "significant". Mexico's standard of living is way improved from just two years ago. Do we focus on India, China, and Mexico's needs (all of which represent nearly 7X the population of the US) or be more concerned about short term hiccups?
Legend's CEO stated Dell's model wouldn't do well in China. Yet, here, at the ASM, they stated they're witnessing 50% growth, albeit from a smaller base. CPQ said the same of the direct model when Dell was first starting. So, Dell's direct model is, again, surprisingly suceeding where retail models stated it would fail.
why did not Kumar address which product categories Dell should be strong in in order to achieve sustainable 30% growth? why SUNW and not Dell (i'm familiar with the differences)? products in Dell's flowchart could well prove a sustainable 30% growth rate despite PCs.
why would Chu visit with Dell regarding storage and come away with a "strong buy" recommendation, yet Kumar, with no visit, state it's a dead issue? what value should we put on these future growth areas?
i remember reading an IDC report in Nov/Dec of 97 stating they believed the market was possibly "saturated" with PCs and projected slower growth going forward. it didn't happen. "saturation" seems so meaningless with all the new product and innovations consistently coming out. |
