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Technology Stocks : Dell Technologies Inc.

DELL 125.97

-1.0%

Nov 25 3:59 PM EST

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To: Jorge who wrote (59270)	8/18/1998 9:35:00 PM
From: AlanH	Read Replies (3) of 176387

Jorge, here's a potential fly in the ointment... The rate of decline in component prices cannot continue. This is essentially what DELL has highlighted relative to BTO and higher margins. This has contributed to a transitory competitive advantage visa-vis price -- btw, there's some contradiction (on this thread) as to whether DELL's "value" has to do with price. If someone can provide a convincing argument that component prices will continue to slide at such rates, then perhaps we can dismiss ASP as a non-issue. Otherwise, those "old-fashioned" competitors will slide down the cost curve, and ASP declines will accelerate [read, PRICE WAR]. Marketshare also looks like a double-edged sword: biz.yahoo.com Industry analysts estimate the overall PC business will grow in the middle to high-teens in percentage terms this year. Dell's revenues have been expanding at least three times as fast for several years. Will someone please explain how the "market leader" can continue to outpace overall PC business by at least 3x? (Seems like a bitter-sweet convergence.) Now, I realize that it's heresy to discuss such stuff on the DELL thread, but I can somewhat empathize with Piper's concerns.

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