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Technology Stocks : Dell Technologies Inc.

DELL 128.43

+0.6%

Dec 24 12:59 PM EST

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To: jim kelley who wrote (20866)	11/7/1997 7:12:00 PM
From: Patrick E.McDaniel	Read Replies (2) of 176387

Jim, the disk drive aspect of component costs. With average selling prices at Western Digital around $173 last quarter, a double-digit decrease puts a lot of moolah into the pockets of the PC manufacturers pretty quickly. If prices go down 15%, the average PC manufacturer could capture as much as $25 extra dollars a PC. While not a staggering amount, it would be an extra point in operating margins. Although COMPAQ (NYSE:CPQ - news) and DELL (Nasdaq:DELL - news) have been slashing prices 15% to 25%, the poor companies just cannot cut prices fast enough to keep up with falling component prices. Component vendors to the drive industry will probably also see pricing begin to fall as a result of similar pressures, although they will probably not be able to capture this benefit into next quarter. From the Motley Fool, Pat

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