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Technology Stocks : Dell Technologies Inc.

DELL 135.82

-3.5%

1:04 PM EST

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To: Father E. who wrote (40793)	5/7/1998 11:54:00 AM
From: Jack T. Pearson	Read Replies (2) of 176387

Wages in Japan haven't dropped, so their costs are still high. Of course if they get their components from the rest of SE Asia, those component costs have dropped quite a bit as those economies have tanked. That's where Dell gets its components. Because of Dell's low inventory, they were able to pass reduced costs to customers immediately and both gain market share and increase margins. Compaq had picked the worst time to stuff the channel and didn't drop prices because they wanted to maintain margins. The yen dropped from the 80's to the 130's. Hasn't had much of an impact on Japan's fortunes. I expect it to drop to the 140's or more. Still won't help. Japan has massive structural problems they aren't willing to deal with. US market for PCs is too dynamic for Japanese companies to PROSPER in. Decision processes in most Japanese companies don't put a premium on speed. With respect to Dell, it takes too long for Japanese companies to get and process customer data.

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