You appear to be making 3 points in your post to John. All 3, IMHO, are either factually or logically incorrect:
1. Well, ASP's are falling at DELL. I guess that DELL is not immune to that.
So what is your point here? As Dell has repeatedly stated, component prices are coming down faster than ASP's. I refer you to the article Mohan posted this morning:
"ASPs are coming down, but not nearly as fast as component prices," said Charles Wolf, an analyst with Credit Suisse First Boston. "In the history of the industry, we've never seen component prices come down collectively as fast as they have. It has not only been memory, but storage and processors."
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2. CPQ claims profitability in the sub-z. DELL says they can't make $$ in sub-Z. Go figure.
I assume by sub-Z you mean sub-K? Of course Dell can make a profit from a sub $1000 computer. Show me the article where they say they cannot. They have a cheaper assembly process, almost no inventory, and no dealers to share profits with. Michael Dell explained this at the annual meeting. As he said, they could make a high percentage profit selling mouse pads, but they won't make much money at it. They have repeatedly stated that they have chosen not to enter the sub-1000 market, and if they feel this will be a profitable area, they will do it. Again, they are looking at "profitable" as the total dollar profit, not percentage profit per machine.
3. DELL's last quarter was not Excelent. This is one point that no one here gets. THEY MISSED THE WHISPER NUMBER !!!
This makes no sense. No matter how profitable a quarter, a company may still not exceed the whisper number. To make the point, if the whisper number was $5.00, and Dell came in at $4.95, you would say they had a lousy quarter? Dell posted an EPS of .44 last quarter, while all the other big manufacturers posted losses or very small gains. They had an excellent quarter. |
