<<I feel VERY sorry for you. Take a look at what you are doing and reconsider. I urge you.>> This is smart advice if you are not LONG ON DELL.
Lucretius, Hsg, and others who doubt DELL's ability to continue to exceed expectations:
Michael Dell has tremendous integrity. It all comes down to TRUST. Please read this review of his speech today. DELL has NEVER been in a better position. The next quarter earnings should blow away expectations. This is not a good time to bet against DELL.
Top Stories: Austin Notebook: Dell Sees No End to PC Era
By Eric Moskowitz
Staff Reporter
10/8/98 1:00 PM ET
AUSTIN, Texas -- Ignoring the pummeling that his stock has taken over the past two
weeks, Michael Dell was upbeat about the PC industry and the future of his own
company, Dell (DELL:Nasdaq).
Speaking to almost 100 reporters and editors Thursday morning at the Society of
American Business Editors and Writers conference, the former newspaper salesman
said the end of the PC industry is not here.
"We don't see this as the year the PC market blows up," said Dell. He pointed out that
the company's growth rate over the first half of 1998 -- 70% -- was higher than its
1994 to 1997 growth rate of 59%. With growth like this, Dell needn't enter the
sub-$1,000 PC market.
In 1994 Dell exited the retail consumer market, even though it was, and still is, the
fastest-growing part of the PC industry. "People said the move would launch us into
obscurity," he said. Now with the pressure to re-enter this market resuming, Dell argued
that it wouldn't be best for his company's shareholders to do so, especially in light of the
recent tech backlash that has knocked some 34% off Dell's stock in the last two weeks.
"We still feel that the corporate market and our expansion in global markets is best for
our shareholders in the long run," Dell said. The company is placing a big bet that it can
replicate its direct sales model overseas, even in currently unstable places such as China
and Latin America.
Dell said his company sold 3 million units in China last year, and he expects the
company to grow by 29% a year through 2002.
"I can see China surpassing Germany and even Japan as the No. 2 fastest-growing
market," Dell said. After all, there are 1.3 trillion people in China, so even if just one out
of every 300 people buys a PC, that's still a lot of PCs, he said.
He also said the corporate market will remain robust thanks to the year 2000 problem.
While a recent chief information officer survey by Merrill Lynch hinted at a decrease in
IT spending in 1999, Dell said companies were still installing software applications and
would need new computers to do this. As an example, he said the Federal Aviation
Administration just requested $100 million more to buy new hardware to install new
year 2000-compliant systems.
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