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Technology Stocks : Dell Technologies Inc.

DELL 129.94

-6.2%

Dec 12 3:59 PM EST

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From: pcyhuang	8/17/2006 11:02:12 PM
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Dell's Woes: Full Story: slate.com Then there's the issue of quality control and responsibility. This has proved to be something of a lost decade for Dell. And a chunk of its woes can be ascribed to its propensity to avoid integration. With prices of raw materials and transportation rising, Dell has had a difficult time maintaining profit margins. And there are ways in which outsourcing the down-and-dirty, low-margin production functions can harm the high-margin intangible assets, like your brand. Customers have complained about the decline in service. Most recently, Dell has had to contend with the burning laptop phenomenon. Dell has taken pains to note that the batteries that are being recalled were made by Sony. But customers and investors have poured out their wrath on Dell, not Sony. Letting somebody else do the hard work to guarantee the quality of your components used to be a great advantage of deintegration. But in this age of selective vertical reintegration, it can also be a liability. pcyhuang huangcapital.com

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