Lee,
consensus 42 cent estimate by 3-5 cents.
DELL missed that.
Expectations are the most important thing in the market.
DELL failed to meet what most expected. I.e. the whisper number.
The stock was punished for it with a 20% correction.
Now we have the second rally attempt, so far it is looking better than the first. But it still leaves a little to be desired.
Also I think Pro money guys are getting tired of listening to DELL talk about how they are doing better than their competition. Everyone knows that.
They want to here what could hurt DELL and how dell is going to avoid that. But DELL it too busy cheerleading their own success to explain how it is going to continue.
The other thing I find funny about their cheerleading is they're talking up of the AP and how they are doing so much better than all the other companies are doing there. Well most of their AP business is in the Australia area + Japan. From what I understand, they don't sell ver much at all in Korea and Indonesia, the two hardest hit countries. The more diversified box makers have much more relative exposure to these countries and henceforth should have greater problems than DELL in relation to them.
RE: As long as there are preferences and unlimited configuration choices, PCs are not commodities. TVs, washing machines, toasters are commodities. Do you have a huge choice of options there? Answer = NO.
Circuit City sells about 100 different models of TVs.
Best buy sells about 100 different models of TVs. There is about a 50% over lap. There is thousands of different models brands feature combination of TVs.
When my wife wanted a new Dryer, she could not decide between 3 models, the dilemma was 3 different option combinations of 5 different options. Color was not an issue.
PC's there are thousands of combinations from many different manufacturers. But all have basic components in common just like the TV or the Dryer.
Just because there are a lot of option does not mean a product is not a commodity.
It is a commodity if:
1) A lot of people sell exactly the same thing.
2) The biggest difference between the same thing is price.
3) The number of units you want will not effect delivery time. (Within reason) 100,000 PC won't necessarily be delivered in the same time as 10, but 50,000 or 60,000 it will be about the same, and there are multiple vendors that could deliver at any given time.
Lets face it PC's are commodities just like the DRAMS and HDD that are in them.
Jim |
