Some good points; however:
Compaq has also emerged stronger after every-single-price war. Also, factor in that Compaq was large enough to be effected by the pc war unlike Dell which has only emerged as a force in this decade if not the past five years.
No, don't throw out gross margins, and Compaq's consistency does not stink. How can anyone say this? Compaq has shown over the past two decades that it has consistently risen to the top of the industry - overcoming all obstacles. Using your methods, we should also throw out Dell's previous quarters. I hope when Dell does have one bad quarter (which it will some day) you don't start to say Dell lacks consistency.
Dell does not make more money per machine than Compaq. What facts do you have to base your claim? I'm basing my statement on that Compaq had a GM of 27.5% while Dell's was roughly 25%. Granted Compaq sells far more high-end equipment than Dell.
Finally about the article, I think M. Dell is wrong to think that large to medium companies rather rely on several companies than on just one. The headaches, hassles, and confusion that results from dealing with multiple firms can be alleviated by dealing with just one. Furthermore, computing these days is getting more and more difficult and complex. Companies such as IBM and HWP can sell the whole package. They sell you the servers (mainframes), pc's, networks, software, and the people. Think of how convenient this is to a large firm. Now Compaq hopes to do the same. Whose strategy will ultimately win: IBM, HWP, and Compaq...or Dell.
As for this quarter, I think it is only a short term blip on the screen. Normal growing pains for an aggressive, expanding company in an competitive market.
Needless to say, I think Dell is a very sold company that should make any holder some good cash. However, I think in 5 to ten years Dell might just be facing the same problems Compaq is now, if not sooner. Just normal growing pains....
Here's an interesting article:
exchange2000.com
-Eddie |
