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Technology Stocks : Dell Technologies Inc.

DELL 133.20

+5.7%

Nov 26 3:59 PM EST

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To: John Koligman who wrote (23543)	11/29/1997 9:28:00 PM
From: Meathead	Read Replies (2) of 176387

Let me just state for the record that I for one don't believe the 1KPC's are instantly obsolete. They are more than enough for most average home users. Their lifecycle will vary greatly from one user to another depending on how sophisticated their application preferences become. Make no mistake, the low end boxes can NOT run many of the new and emerging 3D gaming and productivity applications very well at all. Their performance is very disappointing. These apps will be quite commonplace in a few years. But for Win95, office97, surfing the net, email, 2D games etc. these are fantastic machines. My point is that these are not corporate desktops. They aren't designed to work optimally in networked environments. You can't just slap a 3COM network card in an ISA slot and have the equivelant of a system that was specifically designed to live on a corporate network. Just one of many differentiators like managability. It has little to do with processor speed or memory size. You wouldn't buy a 4dr touring sedan to go "off roading" would you? The fact that you can buy a Geo Metro cheap has not seriously impacted the ASP of a Ford Explorer has it? It can be argued that they both perform many of the same functions and are both considered automobiles. ASP pressure on enterprise systems won't come because corporations will be able to satisfy needs by buying these low priced consumer products. It will have to come from somewhere else.. and from what I can see, margin pressure is still coming from traditional sources like good old head to head competition. A few of the possibilities I would like to discuss are, 1. Should Dell try and compete in this segment? Why or why not? What advantages/disadvantages would their business model create? What effect would it have on profitability and growth? 2. Will the 1KPC continue to canibalize the mid/upper range home sales or will it level off after initial demands have been satisfied? Does it have the potential to displace sales of some business class machines? 3. Will the 1KPC grow the home market WW to the to exceed the size of the corporate market? How long might it take? MEATHEAD

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