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Technology Stocks : Dell Technologies Inc.

DELL 127.22

+3.8%

3:59 PM EST

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To: Doug Fowler who wrote (98472)	2/12/1999 10:08:00 PM
From: BGR	Read Replies (2) of 176387

Doug, 1. The more the price goes down, the more Dell has to sell to make the same money. Using your logic, Dell should give away its PCs for free. Assuming DELL to be a revenue maximizer and not a profit maximizer, of course. An incorrect assumption which makes no business sense IMO. 2. When IBM, Compaq and HP accept lower margins, it forces Dell to accept lower margins. It usually has been the other way as DELL forced lower margins on its competitors by virtue of its superior execution. Even for lowered margins, DELL's margins will remain superior to the 3 that you have mentioned unless they successfully change their business model (no sign of that yet). The 3 companies are profit maximizers as well so it is only a matter of time till they quit. 3. No matter how good Dell's business model, they are limited by the overall demand for PCs. A. DELL has diversified into server and storage and is not in the sole business of selling desktops. B. Worldwide, it will take a while for PC demand to significantly slow down. -BGR.

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