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Technology Stocks : Dell Technologies Inc.
DELL 138.98+4.0%3:59 PM EST
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To: Jim Patterson who wrote (38879)4/24/1998 4:43:00 PM
From: Chuzzlewit  Read Replies (2) of 176387
 
Jim, thanks for your reprise of GTW's results. It is clear that Gateway made tremendous strides from where it had been. As many of us on this thread said before, the key to making money in this business is tight inventory control, and Gateway seems to have figured out how to significantly improve their inventory controls. Even so, GTW has room for improvement which will be reflected in improving margins. The decrease in ASPs had been anticipated, but my bet is that Dell won't see as much of a decrease in ASPs because of its increasing emphasis on servers and notebooks.

While Dell doesn't need to improve margins to substantially improve profits I am certain that it too has been examining its operations with an eye to doing just that.

Your report confirms what many of us have been saying for some time. The way to make money in this market is to adopt JIT manufacturing and jettison retail channels. Just as mom and pop groceries gave way to supermarkets, so too will selling power desktops through retail chains. And just as with supermarkets, the profit dynamic will depend on rapid inventory turns. If you need graphic proof of this assertion contrast GTW CPQ and IBM.

What I can't understand is given the content of your report, how can you still be bearish concerning Dell's business?

TTFN,
CTC
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