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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: Chuzzlewit who wrote (20901)	11/8/1997 2:41:00 PM
From: jim kelley	Read Replies (1) of 176387

Paul, I checked CPQs 10-Q and it attributed their increase in gross margin to the sales of higher margin products (emterprise products and options) rather than any inventory adjustments. They also mentioned improved operating efficiency. I take the last one to mean improved inventory turns and DSO. I agree. I think the assertion that CPQ is the low cost producer due to lower component costs is questionable at best. Their product mix is quite different than DELL's. They have the Tandem offering in the enterprise market along with the proliant servers. These require different components than say the desktops or notebooks they make. Even their notebook offering uses many different components. DELL does not have a Tandem offering. DELL is also the number 1 supplier of desktops to corporate america. It could be argued that it has an advantage over CPQ for the these component costs. Regards, Jim

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