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Technology Stocks : Dell Technologies Inc.
DELL 132.82-4.2%1:34 PM EST

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To: michael c. peterson who wrote (776)12/4/1996 1:12:00 PM
From: William C. Spaulding   of 176387
 
There will be increased competition, but it's difficult to forcast exactly when it will take its toll. As far as Dell dropping prices, all of the computer companies have been dropping prices since their inception. They remain profitable because component prices have also dropped. This reminds me of the fact that the box makers increased their profitability because component prices, particularly memory, were dropping faster than the box makers were lowering their prices. That's why they had increased profitability this year. However, component prices have stabilized, and, in some cases, are increasing in the short term, so this would be a detriment to profits. Also, with more competition, the computer companies will be quicker to drop their prices when component prices drop to maintain or expand market share. This could close forever the window of opportunity that they had for this year.
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