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Technology Stocks : Dell Technologies Inc.

DELL 122.55

+4.4%

Nov 21 9:30 AM EST

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To: Mohan Marette who wrote (99489)	2/15/1999 1:59:00 PM
From: Don Edgerton	Read Replies (3) of 176387

Just received a new Dell catalog. It has a home package for about $4,600. Dell's focus is on the affluent home user who will look at DELL as a MBZ or BMW and the cheap Compaqs as Ford Aspires. If DELL is building new plants, it must be capacity constrained. If capacity constrained, then focus on the high end. Some years back, the U.S. negotiated quotas on the number of Japanese cars entering the market. Japan's answer was to upscale the lines and bring in highr priced cars at their quota number. This led to the Camry and eventually to the Lexus and Infinity moving the Japanese cars to an upscale image. Believe Dell is trying to differenciate itself in the same way. I too have heard derogatory remarks about CPQ from enterprise users. My one experience with their customer service was not good. Just wanted to know how to get to the memory slots on a 4504 - a model built just to use excess Pentium 200 non-MMX chips. The memory was under the power supply. With the BTO models of CPQ (and IBM) where they are using resellers to build the machines, how is CPQ going to provide good customer service? Reder the client to the reseller, who may have had a one time contract to supply a user. When you call DELL, you give them the serial number and they have the config and customer service history at their fingertips. Cost of ownership is the real issue for business, not unit cost. Companies offering themselves as a single supplier globally who can configure to specs and provide a uniform ordering experience are going to be the winners. Dell seems to be closest to doing that with its proprietary home pages for individual companies, uniformity of support and by selling machines with enough gross margin to afford free customer support during the warantee period. (By the time three years is out you need a new machine anyway.) This is why Lucent and CSCO sem to be gaining ground as they add to their product lines. Just some ramblings on my day off.

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