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Politics : Ask Michael Burke

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To: Earlie who wrote (24830)	12/3/1997 1:10:00 PM
From: hpeace	Read Replies (1) of 132070

earlie, too many things in your post...I'll only address a few. first of all cpq says that 35% increases in Europe have overwhelmed them.the little dab they lose in asia will not be missed. and I think that compaq will have at most a 5% fallback in asai. now they do 8-10% of their buiness there. so that is 5% of 9% which is less than .5%. Europe gain dwarfs that loss. I wan quote the dell exec. today that said asia has increased 50%. That's a numbers game since dell wasnt' a player in asia and with small numbers it's easy to go up 50%. if you were shipping 100 and went to 150..that's 50% increase. But, you are wrong about the cost impact on dell and cpq. they will not only compete but wipe out more competiton with the price drops they get on raw mat'l. You are right on the dell is in trouble as others move to direct. dell needs to drop cost more proportionately by feb 98 or they face a pullback. the reports I read say that spending should increase in the far east in 1998. I don't think cpq was counting of korea buying a bunch of home computers. and capital spending will fall only slightly in korea with the problem since the IMF is going to do the bail out and Korea agreed to terms. Buy CPQ and stop worrying... buy the way..cpq also said that they do business in us$ in all countries in that region except japan. and they hedge the yen. I will be right...cpq will have another monster qtr and dell will too. The only thing I don't know is how many of the asian competitors will cpq and dell destroy with this currency issue that works to their favor. by the way, you never answered the question. when the yen went to this level in the jan-apr time period of 1997... why did it hurt the japanese competitors so much and casue cpq and dell to have so much extra profit. answer please... also, did you ever go to the global 500 site and see how the japanese are being killed again in 1996..same will be true in 1997.. it shows that cpq alone makes 3-4 times the profit as the closest japanese competitor on 1/2 the revenue... it shows that GM's profit is more than maybe the top ten japanese companies put together. answer those two questions.

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