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Technology Stocks : Dell Technologies Inc.

DELL 126.59

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3:59 PM EST

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To: Boplicity who wrote (38404)	4/20/1998 12:04:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

Good morning Greg. I don't know exactly what the Seagate upgrade presages. If we are looking at dd capacity being brought under control (i.e, we will no longer see overproduction of disk drives) and a firming in drive price what does that portend for Dell? That would certainly help mitigate the precipitous drop in component costs, but the larger question is how will that affect demand. Put another way, suppose prices stopped dropping for a few months, how would you expect corporate customers to behave? The erst-while bearish argument that dropping costs leads to decreasing gross profits is certainly weakened, but I never bought the original argument anyway. I suspect that if prices start to firm we may see a temporary increase in demand as corporate customers no longer see much virtue in putting off hardware purchases. On the other hand, the actual hardware is relatively small compared to the rest of the costs involved in a major hardware upgrade, so maybe this will not be an important issue. Any thoughts? TTFN, CTC

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