Long,
I agree, DELL does have an advantage over their competitors.
Is DELL vunerable to their tactics, I think this depends on why they are attacking.
Every thing was fine 9-12 months ago.
At some point in the last 6-9 months, Something happened to cause CPQ to change its tactics agaoins the competition.
And now we are where we are today.
I think the big question is: why did this happen?
Is it just a collosial screw up on CPQ's and IBM's part, or did something happen within their industry that caused these companies to miss their forcases?
I think something has changed within the industry.
It caused CPQ and other DELL compeition to change the way they do a lot of things. DELL's advantage has been protecting it from these changes in the industry.
I don't think DELL is immune to the ongoing changes in the PC industry. I think it is a matter of time before what ever it was that got CPQ will get to DELL. This is an industry thing, not a company thing.
the result of these industry dynamics is that DELL is finding itself with much greater price competition that they have in the past. DELL can make money and the competition does not, but non the less, it is greater competition. At a time when DELL's stock is discounting flawless exicution on all fronts for all time to come, I remain of the opinion that the stock is very vunerable. If the dynamics of the industry that got to CPQ, get to DELL in any way shape or form, then the stock will suffer as that is not in the price of the stock at this time.
If you don't follow what I am trying to describe I will understand, I don't know if I explained it well enough here.
Last, DELL may be immune, But I don't think any one is immune to slowing of growth in the industry and at the same time, a increasing deterioation in ASP pricing.
Jim |
