Hi rudedog; Yep, with the severe further decline in computer
prices over the next few years, it will be quite tough to make
a profit. My guess is Dell goes to single digits within two years,
or, if they split again, to a nonmarginable (i.e. penny) stock.
To find possible survivors in the box business, look for a
company that:
(1) Is embracing the sub $1000 market as much as possible,
rather than attempting to escape the carnage by ignoring it.
(2) Already is in the business of selling huge volume very low
margin, electronic equipment, and has a business plan tuned
to squeeze tiny profits from very high volume production of
aging technology.
(3) Is able to produce the entire product in house, thus avoiding
the inevitable costs (i.e. shipping, taxes, negotiating, allocation,
etc.) of buying parts from outsiders.
(4) Has the ability to sell computers to places that sell other
home appliances, like stereos, dish washers, vacuum cleaners,
etc.
-- Carl |
