Dell goes from 12% worldwide to 100% marketshare in one week's time!
(tounge in GV's cheek)
but drops 10% in stock price.
to "double" in revenue Dell needs to double it's worldwide market share and retain stable ASPs. Dell doubled it's marketshare in the U.S. over a period of 2 years, but the ASP dropped by 40%, even while Dell grew it's international and Latin American presence.
what is the probability of the ASP dropping another 40% over the next two years? most of the PC parts providers are currently operating at break-even now. raw materials prices are not dropping. labor costs are rising. chip prices provide the most wiggle room. these prices, though, have an inflexion points which can not be crossed for very long.
the ASP, for the past six months, has stablized. corporate America and Europe is now falling behind, of all places, Shanghai and Hong Kong China, in overall computing power. while China orders new equipment, the U.S. and European businesses, on average, continue to operate on five to ten year old models. despite the rise of the "computer", U.S. businesses produce more paperwork today (reporting requirements) than they did five years ago. the paperless society remains in its early stages.
GTW is having to raise prices. Waite keeps talking to an intellectual cow. even Dell is not sure what Waite is doing.
CPQ/HWP hasn't competed at the same price/production level as Dell and remained profitable. how probable is it that the NWF (New World Female) running HWP will attempt to compete with Dell on a PC price basis when HWP, by itself, isn't competing well now? how can you combine two bad PC sales models to make one good one?
where is IBM? IBM loses money on PCs.
Dell makes money.
what can anyone say or do, to convince the overeducated that this is not 1999? |
