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Technology Stocks : Dell Technologies Inc.
DELL 122.46-8.5%Nov 17 3:59 PM EST
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To: Mohan Marette who wrote (68985)10/3/1998 5:43:00 PM
From: Ken Beal  Read Replies (2) of 176387
 
Hi Mohan,

Re:
Company Quarter Ending Rev.($MM) NetInc($MM) #Shrs(MM) Price/Sales MktCp($MM)
Compaq 06/30/98 5832.0 32.0 1556.0 2.0 46193.8
Dell 08/02/98 4331.0 346.0 1392.0 5.0 87261.0

The bold numbers mean a lot -- CPQ's revenues were 35% higher than Dell's,
but CPQ's profit was over 10 times lower than Dell's.

That tells an interesting story about channel vs. direct.

There are some products that are better sold through channels; for instance,
it would be prohibitively expensive for me to buy a single pencil direct
from Eberhard Faber without it first going through Office Depot (and being
bundled in lots of 10 or 20).

But computers are big enough and complex enough (in terms of
configurations) that I believe Dell has the right model.

For now. Perhaps in 5 years computers will cost $10 and then the channel
model will come back into the fore. (And, if and when that happens, I am
sure that Michael Dell will move his company in the proper direction.)

Cheers,
KenB
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