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Technology Stocks : Corel Corp.

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To: tom pope who wrote (1835)	9/4/1997 3:06:00 PM
From: gregor	of 9798

Interesting that you bring up Dell , saying that there has to be something in it for them (the hardware business). Dell's gross margin last Q. was 21.8% almost the mirror image of Corel's. And that is their forte`. So one, how is Corel even going to compete and two do they really know what they are doing. They can't rely on economies of scale so they would have to push for more features at a higher price. Yes, Dell is over 10 billion in sales and spent a "whopping" 48 million on research and development last Q. 1.7% of sales. So, they let other companies spend on the R & D, dummies like Corel that follow every turn in the maze of high tech. I can see why Dell would like to expand into software, they can buy it on the open market put a 100% markup on it and still let the software developer make 40% at which after spending for R & D they go in the hole, and expand their margin on a "gravy" product. I just can't see the reverse being true. Corel has never run their business on a budget-- I doubt if they have one. And they expect to make a killing on thin servers, or network computers or whatever!! Sorry I just can't see it......gregor

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