Rudedog-
Thanks for your comments (as always).
I thought the analyst made some significant points.
The main one being that there is an undeniable (unstoppable?) consolidation of the industry towards the big 4...the strong are getting stronger, the weak are getting weaker.....question is, looking out 2,3, 4 years, are companies like Packard-Bell, Acer, (or IBM or HP) etc. going to be selling PC's at all? What implications could it have for Compaq and Dell if these companies either (1) are out of the business altogether or (2) Do not effectively compete on price and just take profits (sales) where they can get it.....Even among the top 4, look at HP and IBM...HP has effectively made the decision hold the line on margins (and prices), resulting in a more profitable PC operation, but one that will be losing a lot of battles to other bidders for sometime to come...going forward, this decision has got to be a boon for Compaq and Dell (when bidding for large corporate accounts, government, etc)...IBM, also, can not make money on PC's....sooner or later, they will need to go the road of HP, exit the business, or become (a lot) more efficient...Also, can you disagree with his contention concerning the 5% marketshare hurdle in the server market?
Rudedog, I know you are as knowledgable as any (on the thread) concerning future IT trends, but where do see the obselecence (sp?) of the PC really becoming an issue in the next 12/18 months? Or even the next 2/3 years? Are corporation, businesses, educational markets not going to continue to buy PC's?..........If anything, IMO, the consumer market will be the first place where there could be a shift away from PC's to other gadgets...but we have yet to see a clear shift even here....I just saw Michael Dell on CSPAN last night....and when asked the question "Are you seeing any increase demand due to Y2K"...his answer was the standard "about 30% of the installed base" is replaced each year...and then "our customers are telling us that in the next year that they plan to replace their existing PC's at a rate exceeding 30% due to Y2K, and the implementation of ERP systems". This sounds pretty bullish to me.....Dell also mentioned that he believed small and medium-sized businesses would probably be increasing their purchases as well as we got closer to the Y2K problem....
I think your comments addresses (largely) the enterprise segment, but here, again, couldn't Dell (over the next 12-18 months) pick and choose certain segments (storage, low, mid-range servers) and grow these at significant rates without interruption...and with a continued fast PC growth rate, continue "hypergrowth"....Although I agree that high-end enterprise is a different ballgame, it looks like there is plenty of (hyper)growth opportunities left for Dell for the next several quarters....
I guess what I am getting at here is that despite any overriding technology trends that could affect sales of PC's or enterprise in the future, until these trends manifest themselves into a slower growth rate for Dell, I fail to see where the investment community (investors) will punish Dell for NOT being in the forefront of the technological shift....And I fail to see where Dell's business is going to suffer in the next 12-18 months....
(I might be a bit different here, but I think the market is much more short-sighted than most believe)..
Your comment: <<The biggest problem with that whole analysis IMHO is that the 'market'
is so poorly defined as to make these projections meaningless. 10 years
ago the 'market' included only relatively disconnected desktop PC's, now
it includes 'PC servers' (whatever those are), workstations (but not
'big' workstations), network components - in short, whatever the big
boys decide to sell becomes part of the 'market'.>>
You are right that the whole metric of 10%, 13%, 15% growth is really malarky, because the market is really made up of numerous "sub-markets" with varying growth rates, total revenue, etc....now, and in the future..These "sub-markets", in some respects, have little to do with each other (ie. Toshiba's success in notebooks, but lack of success in other areas)..
It is a bit misleading to quote overall market growth in this context (as a benchmark of measuring health for participants in the industry), but it seems that (industry) analysts and commentators have forced the discussion along these lines (Falling ASP's, another misused example), and often force CEO's to answer questions along these lines...
Having said this, the major players in the industry (Dell, HP, IBM, and CPQ) play in most of the different "sub-segments", so if (these nebulous) overall growth rates increase from (for example) 10% to 13% to 15%, it is a fair bet to say that the "big 4" will be large (or to some extent) beneficiaries of this additional growth...
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