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Technology Stocks : Dell Technologies Inc.

DELL 117.19

+3.5%

Jan 22 3:59 PM EST

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To: The Phoenix who wrote (66898)	9/23/1998 4:10:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

You are missing a key point in your argument. Suppose Compaq grants exclusivity to an intermediate channel member. There is nothing to prevent that channel member from turning to a Compaq competitor for machines that Compaq is selling direct. In other words, Compaq cannot prevent a channel member from carrying a competing line. And that's what will happen. It isn't an issue of the machines that the channel doesn't carry causing the channels to drop Compaq. Example: suppose Compaq decides that it will continue to sell its retail models, CR, through the channel, but will sell its business model, CB, direct. Now the channel has a vacuum in its business line so it seeks a business model from HP or IBM or Sony or .... Or it simply pushes those business models it currently has harder than before. This must translate to lost sales for Compaq because the channel member will continue to sell business machines to its customers. If you are contending that that signing such an agreement will prevent the channel member from selling competing manufacturers I think this would run afoul of restraint of trade legislation. TTFN, CTC

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