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Technology Stocks : Dell Technologies Inc.

DELL 122.55

+4.4%

Nov 21 3:59 PM EST

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To: Jack T. Pearson who wrote (44014)	5/21/1998 1:19:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

Jack, perhaps I chose the wrong words. What I meant was that the prices of CPU's and storage devices have dropped precipitously because of severe over-capacity and general economic problems in Asia. The rate of decline we experienced these last few months is much greater than the rate of decline during those sixteen years. As a result, companies like CPQ, with sizable inventories and resellers as part of their channel, experience profit squeezes. Oddly enough, by shifting their choice of CPU to the less expensive Cyrix and AMD offerings, IBM and Compaq exacerbated their problems by forcing Intel to drop prices faster than had been anticipated. Dell's emergence should raise a warning flag to Compaq. Unless Compaq is willing to jettison the use of resellers it is vulnerable to losing server, desk-top, and portable market share to Dell. TTFN, CTC

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