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Technology Stocks : Hewlett-Packard (HPQ)

HPQ 25.88

-0.1%

Dec 5 9:30 AM EST

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To: w0z who wrote (1720)	8/26/2002 1:20:30 PM
From: Dave B	Read Replies (1) of 4345

Bill, Indeed Dell's total R&D budget is only 1/3 of what HP spends on printers alone, That same ratio probably holds for the R&D budgets for PCs and servers as well (I'm just guessing) and yet they took over the #1 spot in PCs for a while.. Dell (the company) isn't about creating new markets and bringing new products from R&D to the market. It's about taking products that are starting to reach the "commoditization" stage and selling them much cheaper than anyone else. The key question will be whether Dell can market products to the 80+% of customers who just require a basic workhorse business/photo/inkjet printer (whatever market they decide they want to go after) at a price and quality level that customers will accept. However, I'm not convinced that they're actually going to do any of this. I suspect that Dell is throwing out a number of smoke screens under the strategy that when the enemy is confused (post-acquisition), you should do as much as possible to confuse them even more to get them to break. In spite of the HP press releases, I'm sure the "war rooms" are packed right now with people trying to figure out how to respond to 20 different "what-if" scenarios if Dell gets into the printer business. That's a lot of wasted time and effort if Dell doesn't really get into the market. And the PC guys are spending the same time and energy responding to Dell's "white-box" announcements. Dell may very well be throwing out press releases while focusing their real efforts on taking share in their core businesses. Just some thoughts, Dave

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