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Technology Stocks : DELL Bear Thread

DELL 133.78

-0.1%

Nov 14 9:30 AM EST

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To: Jason W. France who wrote (132)	3/14/1998 4:33:00 AM
From: Jacky AY	Read Replies (1) of 2578

I would like to solicit some views on why Dell WILL NOT continue to grow revenues at 50% per year and thus continue to grow earnings at some meaningful rate that will allow the stock to continue to move up. Very simple. The PC unit growth for the next two years is going to be in the low teen range. Note that this number is for unit growth. But, ASP is going to plunge, if not already begun, at least 15-20% per year as users continue to embrace sub-$800 computers. Balancing these two figures, the PC box making business is going to be, at best, flat in foreseeable future. For Dell to grow further, it has to eat into others' lunch. We already heard from CPQ, HWP, and IBM saying they'll take whatever action to defend market share. Can you tell me how Dell is going to outgrow bigger competitors? Finally, Dell will be surprised that people are really budget-oriented. Sub-$1000 market already accounts for 40% of total PC unit sales; and it's a matter of time become $2500 PCs become totally nonexistent due to insufficient demand.

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