Mr. Aloha.
How many people will buy a 400Mhz DELL for $2400(?) when they can get a 266Mhz for $1500(?) How many units will ship? What are the margins? What percentage feels the need to pay $900 more today for what will be $1500 in six months? People are learning that it just doesn't make sense to throw money away for a 6 month advantage
Now do you understand why Dell does'nt target the individual consumer
as heavily as corporations? Your livelyhood is not based on the IT infrastructure or computing power of your home vs. everyone else on your street.
Do you realize how expensive it is to go through the physical corporate replacement of a computer? It can easily cost more than the PC itself. Many companies are forced to upgrade periodically to stay competetive and will buy the PC with the longest lifecycle in
order to extend the time it stays on an employees desk. Today's leading 400/100 systems have the potential to outlast the 266/66 by
at least two years not six months.
Here is a simple lifecycle cost analysis (This is how companies, not individuals view PC purchases.
HIGH END PURCHASE
one time PC cost 2400
one time transition costs 2000
yearly admin costs 4500
5 year total 26,900
Cost per year 5,380
YESTERDAYS BARGAIN TECHNOLOGY
one time PC cost 1500
one time transition costs 2000
yearly admin costs 4500
3 year total 17,000
**** UPGRADE AGAIN
one time PC cost 1500
one time transition costs 2000
yearly admin costs 4500
2 year total 12,500
5 year total 29,500
cost per year 5,900
Multiply that by 1000 systems. What makes more sense, a savings of 900,000 or a savings of 2.6 Million?
Your response is typical of someone who does not understand who buys these new products, why they buy them or how product transitions occur and why they are hugely profitable for companies like Dell. You like most, can only conceive of a PC's value based on your own usage model.
Dell is right now ramping up sales of their 400Mhz/100MhzFSB systems.
Meanwhile they are ramping down sales of their <=333Mhz/66MhzFSB systems. They are the masters of these types of product transitions
and are leading the way. Why? Because that's what their corporate customers DEMAND. You can bet they won't be stuck with any E&O when the industry fully shifts to 100MhzFSB purchases later this year.
Right this moment, companies are purchasing 400Mhz systems. Dell will
sell more today than they did just yesterday. The ASP's and margins are extremely healthy on these systems and that goes directly to the bottom line. They've done this with every-single-product-upgrade since the 286 processor... and all along the way there were folks
like you saying it was a mistake to be selling next generation systems
that nobody needed, wanted or were willing to pay for.
History proves your demand concept to be incorrect.
MEATHEAD |
