Back to our commodity discussion (final thoughts):
IMO <<PC's are a commodity and are moving more and more towards it. PC's
are plastic boxes w/ chips. If I handed you a spreadsheet that was
printed out from a PC, would you know which brand PC it came from? >>
I think you are continuing to view PC's as a commodity from a assembly/output viewpoint and not from the viewpoint of how the consumer (corporate and individual) views a computer purchase.....I don't know about you, but anything I spend over $100 I comparison shop, and try to get the best combination of reliability, service, value, and performance....
<<Many claim that PC's aren't a commodity becuase of differences in service when there are
problems. while this might be true now, as I think prices will continue
to drop and computers become cheaper and cheaper (much like calculators
in the 70's and calculators now) businesses and individuals will simply
toss them in the trash and buy a new one if probelms arise later on in
the product's life. ie-- service will not be a big issue.>>
In the large corporate market, where Dell makes over 80% of its money....service will continue to be very important (regardless of the consumer market...where I think service/reliability will always be important too)........TCO (Total Cost of Ownership) is the main driver , not initial price, for corporate purchasing/IT managers.....
<< As techniology
moves ever forward, PC manufacturing will become more and more automated
(much like cars) and they will be spit out of assembly lines like coke
is spewed into cans.>>
I think you are confusion automation with commodization....I would never say Coke is a commodity...just the opposite!
<<Prices will plummet. competition is a killer.
People will buy the lowest cost machine (perhaps those w/ the prettiest
plastic box design will benefit somewhat but not in any meaningful price
difference) DELL is no longer the low cost producer and will continue
not to be as CPQ ,IBM, etc. (the list is miles long) and even local
producers like my Grandma spit out PC's at cheapoer and cheaper prices.>>
ASP's have gone down for several years now, and Dell has maintained and even accelerated its growth.....If your thesis is right, we should have seen some indication of it by now.......
<<DELL will still be here, but it will receive a PE of around 10x like
other PC makers.
This is coming. At 80x earnings DELL has made you alot of money at the
great expense of fools that will hold this stock till they die (the "you
can have my DELL when youi pry it from my cold dead hands" type
investor) Best to exit and take advantage of thesse suckers while you
still can. At some point, even these individuals will sell out. DELL L-T
looks to be about a $20 (or lower) stock w/ the current shares
outstanding and assuming a top of the econmic cycle situation. PC stock
prices will of course drop further as we enter a recession. All of this
assumes that some really smart kid Teddy Gates doesn't invent a new
machine that replaces the PC of course (which is HIGHLY likely if you
look at history). >>
I guess we'll see.....Me, I am very comfortable with holding Dell (based on current information) for the next year......Only 9% marketshare, Luke, and Dell continues to crush all comers........There's a lot of money yet to be made!
With this, I end my portion of the argument.....Thanks for the exchange..Time will tell |
