All:
Just returned from DELL meeting. Very pleasant, happy atmosphere,
happy crowd. Assorted notes:
1. Dell said that they agreed with industry analysts predicting
20% growth in industry for next several years.
2. Also pointed out that DELL is exceeding industry growth by at
least 3 times:
Region Industry Growth Dell growth
Americas 21% 65%
Europe 16% 49%
Asia / Pacif 15% 135%
3. When asked how the rush to the direct market model would affect
DELL's future sales, Dell replied:
a) Thus far has been very beneficial. Because of the rush to go
this way, many companies/individuals who were planning to buy have
gotten the message that this is the most economical way, so are
buying from DELL rather than waiting.
b) Does not think that other companies with different marketing
modes, thinking, and strategies can successfully copy DELL's model,
and cannot equal their economies.
4. Talking about computer market, said roughly 50% were first time
buyers, which DELL did not seriously target, and the other half was
divided (22/28) into upgrades and additional machines. This is their
target market, the 'knowledgeable' computer user.
5. Did not expect crowd they got. Had to procure an additional
100-200 seats at last minute, still a lot standing (though some seats
did not get used) Very large, happy crowd. No frowns (would bet the
only unhappy DELL shareholder is an EX-DELL shareholder) Several times
interrupted by applause.
6. Meredith, CFO, was asked about his projection (can't remember
exactly) which he had published within last quarter about DELL's
growth. He stated he still felt that the projection was valid,
though perhaps a bit conservative.
7. Michael was asked if DELL had any plans to offer a good deal to
shareholders who bought a DELL computer. Michael replied instantly,
"We offer EVERYONE a good deal" (brought down the house)
8. Asked if DELL had any intention of instituting dividends, Tom
Meredith, CFO, said DELL had no plans to offer dividends in the
future; that DELL believes the way to enhance stockholder value is
through stock dividends, and share buybacks to help alleviate the
share dimunition.
9. Short, cherubic grandmotherly type asked Dell, "You've been good
to us. Are you taking your vitamins?" Crowd loved it.
10. I asked what success DELL was having in duplicating their US
efficiencies overseas, to which Michael replied that in Europe even
more efficient than in US. They have assembly plants in Ireland and
Malaysia (think that's right) from which they ship direct.
11. Showed chart which showed Return On Equities, needless to say,
DELL is doing well (can't remember exact data, and didn't write it
down)
12. Asked about internecine warfare by boxmakers, couple of
responses: 1) that the price cuts thus far experienced were in a
typical range for this time of year; 2) that they were based on cuts
in component prices and were merely passing on production savings to
the customer; and 3) CPQ's CFO or CEO had recently reaffirmed their
intention of attaining triple digit ROE--that would not be possible
within the framework of price wars. Concerns were greatly overblown.
13. One individual asked about DELL's presence in Russia. Michael
replied that they did have an outlet there which was doing nicely, but
that economic conditions in Russia did not permit him to envision
large growth there short term.
14. Dell was asked if his presentation would be placed on internet.
Said they did not have plans to do so, but looked as if he might
consider it. Can someone check? I'm tired!
That's all I can remember right now. (Side commentary: market down
well over 100 and DELL is up--sure hope y'all took my advice and held
on!! I bought more today after meeting.)
I'll try to answer any other specific questions you may have, with
Sig's help. Met several other investors there from various locations.
The ones I talked to were unanimous about one thing. They are holding
through thick and thin, but didn't expect much thin. **g**
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