Chuzz- You raise good points (as always)...Let me add for discussion..
If, in 5 years, we are looking at a situation where the commercial PC space is divided into the "haves" (Dell, Compaq) with enormous market share (25-30%), and other bit players (Micron, Gateway- who would primarily be consumer oriented), and a possibility that either HP and/or IBM are no longer selling PC's for businesses (although maybe notebooks,etc.) in that space....why couldn't we see an EASING of price pressures.....and higher gross margins (I'm only talking PC's here) due to a lack of competitiveness..ie., an almost oligolopy market for business PC's...
Maybe we could see lower unit growth per annum (5 years out) but improved margins for these units....I think there is an assumption that pricing will always be as competitive (as in the past)...This is not necessarily going to be the case..
Additionally, surely by then, Dell will need not compete on price (to the extent) that it has needed to in the past (or now)...the brand will continue to gain in value, and, as time goes on, Dell is being seen more and more as the "quality" play, and not the "low-cost" play..we should continue to see benefits to margins as a result, and, indeed, this may a component of a rise in gross margins as time goes on....
As you stated, Dell may (should) have increased enterprise capabilities (and who knows what else) by then...
So, yes, slower units, but (perhaps..more likely than not) better margins for these same items, no? |
