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Technology Stocks : Dell Technologies Inc.
DELL 132.08-0.8%Dec 1 3:59 PM EST
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To: david jung who wrote (18555)10/17/1997 9:56:00 PM
From: Meathead   of 176387
 
''There's going to be a train wreck'' in PC stocks. "

I must respond to Herb Greenberg's SWAG at the
impending PC price war (perpetual isn't it?)

"Compaq Computer reported lower- than-expected
earnings yesterday"

I disagree, I think they came in 3cents ahead.
The first sentence is erroneous and generally
sets the tone for the entire article.

"Compaq CEO Eckhard Pfeiffer said something to the
effect that in the commercial market, ''on a machine
for machine basis, we're lower than Dell.'' "

Read between the lines: Only if you buy one machine
at a time. Dell genrally sells package deals to their
Corp Gov and Edu accounts. Thats the way it's done.

"Why worry? Because profit margins for Dell and
Compaq can't help but start to fall, especially
as consumers flock to surprisingly powerful
machines with price tags of around $1,000."

Notice the word CONSUMERS. These guys just don't
get it. Believe me, if I'm running a business
in a highly competetive industry, I want to
gamble with the cheapest most unreliable PC's I
can get my hands on!

"Dell is the most vulnerable, Fleckenstein and
other short-sellers say, because it's so
dependent on PCs. Compaq can offset some of the
margin crunch (at least temporarily) with its
sales of computers that manage corporate PC
networks."

Gee! Too bad Dell doesn't have a product
offering that can manage a Corporate
Network! <g>

"It's also believed to have more room than Dell
to cut costs. "

Translation: Compaq is still somewhat bloated.

So, who gets hurt worse if an all out price war
were to develop? Dell, Compaq or Me?

ME-ATHEAD
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