Sig,
Hi!!
RE:http://www.siliconinvestor.com/readmsg.aspx?msgid=18492828
"DELL has sold competitively priced PC's at a profit, while H-P, Gateway, IBM and others have lost money on them. "Companies can't hide a 10 point disadvantage" when margins collapse, Groves said."
"as Michael Dell explains it, DELL operates on a belief that all technology products follow a similar pattern. Soon after a technology product comes to market, it is a high-priced , high-margin item made differently by each company. Over time, the technology standardizes,the way PC's standardized around Intel chips and MSFT operating systems. Then parts makers blossom, manufacturing costs drop and the technology starts becoming a commodity."
DELL monitors those patterns. At a certain point between...this technology is now ready for DELL's entry...The margins are huge...Michael drools...DELL then drives out the costs and perfects the manufacturing and uses their leverage to buy the parts much cheaper...
Best, Kemble |
