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Technology Stocks : Dell Technologies Inc.

DELL 133.18

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Nov 28 12:59 PM EST

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To: Jason W. France who wrote (34738)	3/17/1998 10:22:00 PM
From: rudedog	Read Replies (1) of 176387

Jason - Dell averages 23% margin, CPQ averages 27%, CPQ has a higher percentage of servers in the mix... At the unit level on any unit Dell probably has better margins. I believe that they have at least the 45% on servers that CPQ has, just their mix has fewer servers. This would imply that if Dell can continue to grow server share their overall margin picture will improve. But it also means that if they have to take a margin hit in servers to grow (or maintain) server share, they will lose a disproportionate share of earnings. If they double server share but do it at a 23% margin, they will add nothing to earnings - the gain in volume will be exactly cancelled by the loss in margin. But I don't think that's what they plan to do...

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