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Technology Stocks : Dell Technologies Inc.

DELL 117.44

-1.6%

Nov 20 3:59 PM EST

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To: Jim Patterson who wrote (26482)	12/30/1997 12:35:00 PM
From: Meathead	Read Replies (3) of 176387

Jim - I think the issue here is that you over-generalize everything. This can be dangerous if you put money on it. Many of your statements verify that you don't know much about Dell the company or the computing business. It requires full time analysis to really understand what may or may not be happening. Take some time to study Dell business model... you'll see why they prosper and then it won't be so hard to believe as you put it. Does the decline in Y/Y growth rate concern you ? Does the decline in Q/Q growth rate concern you ? Why would it concern anyone? It is expected and factored into the stock price. Dell has been guiding the industry expectations lower. It's not like everyone expects 60% yr/yr growth forever or that were all too exhuberant to expect a slowdown that's gonna catch everyone by surprise and tank the stock. We know what the projected growth rates are thru 2001.. Do you? Is there any solid evidence that they are not loosing units to sub zero machines ? How can they be loosing units into a market they don't target? Is the Ford Explorer losing market share to the Geo Metro? Again, understand that sub-zeros are entry level consumer machines.. Dell has yet to persue that customer base. Quick math.. sub-zeros accounted for 36% retail sales last month. Retail sales account for ~30% of all computer sales (the other 70% to businesses thru resellers or direct). This means about 1 out of every 10 machines sold was a sub-zero.. sold to consumers, bought from BestBuy, CompUSA etc. 10% of Dells customers are considered consumers so if 10% of Dells 10% consumer base decided to buy a sub-zero instead, Dell could conceivealby, worst case, take a 1% unit hit on their low margin machines. Are PC prices falling? When have they not! Are they falling faster than normal now with the overly hyped introduction of the sub-zero? No, not by historical standards. Why are all these component prices coming down in the face of shuch high demand ? Overcapaciaty in some commodities, industry consolidation among PC makers. See what I mean? This is great for Dell. MEATHEAD

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