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Technology Stocks : Dell Technologies Inc.

DELL 128.43

+0.6%

Dec 24 12:59 PM EST

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To: Techie who wrote (48353)	6/20/1998 6:54:00 PM
From: rudedog	Read Replies (1) of 176387

Techie - Let me clarify a few points. What exactly made you think they were doing this for the embedded market only? They are certainly NOT doing this for the embedded market only, Intel's primary motivation was to provide a credible offering in the sub 1K market, as a defensive move against AMD and also to diversify their offerings. The embedded market is just gravy. The PGA is not just for embedded but because a PGA is surface mounted it is less applicable as a PC part. The removable parts serve the PC market. Perhaps you don't think these CPUs are powerful enough but believe me lots of folks do Millions of people are buying these things so your point is obviously well grounded in fact. My opinion is that there is a large and growing market for this class of machine and that they are plenty powerful enough for many users. The market moving towards cheaper PCs does have an impact on every PC OEM including Dell The impact on Dell has yet to be determined. Dell's ASP will not go down if they don't enter the market. This could of course impact their revenue, but margins would only be affected if the existence of $1000 or even $500 computers changes the midrange prices significantly. By way of comparison, many people have thought for years that the advent of Intel-based midrange systems would demolish the margins of the RISC vendors. There may be some evidence that growth in the RISC segment has been reduced (although it is currently growing at about 12% annually which is pretty healthy) but there is no evidence that margins have eroded. Likewise ASPs in that segment have not been affected by the existence of comparable Intel platforms at half the price. So at least for me, there is not compelling evidence that the sub-1K segment will necessarily have an impact on Dell. This will only happen if Dell enters that market in a way which does not support their current model, which history suggests they will not do.

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