Jim:
My 2 cents worth:
<<< I agree, DELL does have an advantage over their competitors.>>>
Cash in the bank, specifically designed modern plants,
new foreign presense, fastest implementation of new technology,
plus many more...
<<<< Is DELL vunerable to their tactics, I think this depends on why they are attacking.>>>>
CPQ tactic has been to buy( possibly dated) factory facilities scattered around the country so they could dive head first into the most competitive field of low cost consumer computers, to get their own retailers/stores teed-off by also dealing direct, by canning 12,000 Tandem people, by having to demote
executies obtained in the Tandem/Dec acquisitions, etc.
This was not an attack on Dell, it was really hard-boiled, long term, American business practice that can be real good for the USA
and American workers as it will drive out inefficient and foreign competitors and even some like IBM if they can't stand the low margins in that market.
The CPQ situations is so complicated and unresolved that it is uncertain if or when stockholders can benefit.
<<< Every thing was fine 9-12 months ago.>>>
Wrong: Prices were dropping, Dell was expediting construction
to meet ( promised) orders, was desperately seeking, training new
employees, working out service arrangements with Wang after losing
DEC. Same today, Dell does this behind the scenes very efficiently.
Does not say to shareholders, hey we got a problem. They just solve the problem in a way that supports the customers( who happen to be rather sophisticated)
<<<< At some point in the last 6-9 months, Something happened to cause CPQ to change its tactics against the competition.>>>
Whatever they did so far has little effect on Dell except
for a bit of price cutting in the server field
<<< And now we are where we are today.>>>
Where is that??? I notice an exceptional amount of BS and worry
in the tech field, and concern over the high DOW. If some of the billions invested in those (so far non-producing)web stocks like aol,yhoo,xcit belonged to me, I'd pay attention too.
Price of Dell looks OK to me
<<<< I think the big question is: why did this happen?
Is it just a collossal screw up on CPQ's and IBM's part, or did something happen within their industry that caused these companies to miss their forcasts? I think something has changed within the industry.>>>>
Industry changing fast all the time.Volkwagon buys Rolls,
Boeing buys Douglas, NB buys BAC( or did they)Hehehe)
When all is done, CPQ may be the main integrating force
in consolidations, E Pheiffer has done it before, they have lots of cash, European presence. If they can keep some profits coming in
perhaps another acquisition when the DEC dust settles. Notice they NEED SOME PROFITS and therefore cannot afford to undercut the lowest
cost (most efficient) producer, Dell.
This is going to be a fun race to watch, if anyone is concerned
about market cap, come back in three years and compare (or add)
that of CPQ, DELL, and IBM. They should still be around(ggggg)
Sig
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