Dell Technologies Inc. Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc.

DELL 117.44

-1.6%

Nov 20 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: stock bull who wrote (71275)	10/11/1998 7:34:00 PM
From: rudedog	Read Replies (1) of 176387

Even in the business sector, Dell's ASPs will not move much unless their primary competitors (CPQ, HP and IBM) produce a cost-reduced business machine with equivalent features, something they have been reluctant to do. But I believe that will happen in 1H99. CPQ is producing consumer machines at a cost of under $300. As those machines start to sell in volume, the technology will obviously work its way into the commercial lines, even if prices don't fall immediately. The usual pattern is take the margin as long as the price points hold, then follow it down. CPQ used to price at about 5% above Dell, but now I think they intend to price at 5% below Dell. I don't think that Dell is doing the same kind of board level integration as CPQ at the moment. But I would expect for prices in the commercial market to start taking a steep drop in 1Q99, and continue down, maybe as much as 10% per quarter. Due to engineering and component changes, this can all happen while preserving mid-20's margins. Given that margins can be preserved or even improved as ASP's drop, it turns into a running game to grab the volume.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next