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Technology Stocks : DELL Bear Thread
DELL 122.46-8.5%Nov 17 3:59 PM EST

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To: Bilow who wrote (1654)8/25/1998 2:40:00 PM
From: Mitchell Ryan  Read Replies (1) of 2578
 
<<This is a major problem that DELL has failed to address.
It is quite similar to the major problem that the US auto
makers faced when they became uninterested in selling
small, cheap, automobiles.

The problem for DELL happens when the affluent families (and
businesses) start buying the cheaper computers.>>

Bad analogy! The US auto makers are doing quite well selling high priced vehicles (SUVs for example) to the affluent. If your argument was true, the roads would be dominated by small econoboxes. These small, cheap, automobiles were a reaction by the public to high energy prices. Now that fuel is cheap, big and expensive seems to be in vogue.

The real reason why many consumers don't need the highest performance PCs is that the bandwidth into their homes is insufficient to fully exploit the capabilities of higher-end machines. The bandwidth limitations will be solved, and this will enable new classes of applications that will fully exploit these high-end systems. Many consumers who purchase sub-$1000 PCs with the expectation that the system will not be obsolete in 3 years, will be in for a rude awakening.

Ryan
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