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Technology Stocks : DELL Bear Thread

DELL 125.97

-1.0%

3:59 PM EST

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To: jjs_ynot who wrote (247)	3/20/1998 12:25:00 PM
From: rudedog	Read Replies (2) of 2578

I see two problems. 1) Dell tends to stay above the low end to maintain their earnings, which limits their PC market opportunity, while avoiding the infrastructure costs which a move into the high end usually brings. This only works in the relatively narrow market band where they currently live and is not a good long term plan. 2) They will have to allocate an increasing amount of resource to support their existing base to keep customer sat up - MSFT has had to fight this battle and the costs are stunning, rising 10X per year. This will be very hard to do even on the growth curve they have maintained. I doubt this will be apparent for a while but if they are not using this period to plan for that transition, Dell investors could be in for a big surprise sometime in the next 12 months.

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