Carl:
A few of your points left me scratching my head.....
<<But this is all a diversion from what underlies our true
disagreement. The real question is what will tomorrow's
consumer want in a PC.
You think he will continue to want mid to high end
machines. I believe he will be satisfied with cheap
low end machines.
<<The recent drops in ASPs suggest I am right. If ASPs
go back up, I will admit I was wrong. But I don't see
that happening yet. Instead I see prices continuing
to drop.>>
ASP's went up in March and April. Dell is quoted by Lehman as stating that ASP's are going up currently....Also, this depends on who's ASP's you are talking about....I guess CPQ's ASP's have gone down pretty significantly lately (and continue to do so)!
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First of all, Dell sells the vast majority of their PC's to corporations (not consumer), well over 80%+........Needless to say, corporate needs are different from Buffy the 13 year old teenager....
Secondly, in the consumer market, not all computer buyers buy low-end, low-power, "cheapest possible" computer. Sure some do. Sure maybe most will. Remember this: These consumers have never been Dell's target/Dell would not be near the company (it is today) if these consumers were their target/This is CPQ's territory (and they can have it!)...Dell does not have the retail distribution in place..... But guess what...Dell doesn't care (Sure, Dell may offer a Celeron based model later this year, but rest assured, no one at Dell sees this market segment as the future of the company and/or any significant future profit vector).....But there is a healthy, existing, and growing market for consumers who want the latest technology, lots of speed, etc......These consumers are much less price-sensitive than the sub-1000 market.........Sure, it is smaller than thoseDell caters to this consumer market and does quite well...
In closing, in one of your earlier posts, you kept make analogies to the car industry.........If you think about it, the car industry is not a good or relevant analogy (as a harbinger for disaster) for Dell and/or other computer makers.........We can discuss if you wish...
Good luck with your investments..
What people are looking for in a PC is in some ways similar
to what they are looking for in a car. Power, efficiency,
performance, low cost, low maintenance.
There was a time when all cars were expensive. When customers
selected parts to get a car just like what they wanted.
When there were 100s of car manufacturers, the vast majority
of which were not vertically integrated, but instead bought
engines, for instance, from other makes.
Those times disappeared when industry managed to make a
car with which customers were satisfied at a low price. The
market then became a commodity, with relatively small sales
at the luxury end. The makers that were not vertically
integrated went bankrupt. A few luxury makes survived,
but not for terribly long.
I think the personal computer industry is beginning to make
this same transition.
I'm going to give another post after this one that will
show more clearly how cheap computers can go, depending
on what it is that the customer needs. |
