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Technology Stocks : Dell Technologies Inc.

DELL 129.18

+0.6%

2:17 PM EST

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To: Sig who wrote (20926)	11/10/1997 4:03:00 AM
From: Markus	Read Replies (2) of 176387

If Dell ever decides to build a low cost computer... Hi Sig, You wrote, "If Dell ever decides to build a low cost computer( which they won't do soon, if ever) CPQ and other low cost manufacturers will thereafter end up with negative profit margins, and would be best to follow M.D's suggestion as to what to do with those divisions." I strongly believe DELL cannot compete in the low cost computer, even if they want to. The biggest obstacle is shipping cost. There is no way that a customer wants to pay a $50 to $100 shipping cost for a %$700-$1000 computer system, where the shipping cost will represent almost a 10% of the computer. In other word DELL direct selling model itself has prevented DELL from entering that low cost sub 1K PC market. That is why I must disagree with you on your statement that CPQ and other low cost manufacturer will be in the red, if DELL enter that particular segment of the market. Good Luck to you Sig, Bye.

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