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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 2:09:00 PM
From: Chuzzlewit  Read Replies (2) of 176387
 
Mohan, this part of the quoted article is quite misleading:

But recent data on worldwide PC sales for 1998 suggest Dell's meteoric rise may be slowing, a factor that also was cited after the stock's fall on Friday.

According to International Data Corp., Dell's fourth-quarter computer shipments in the United States were only 2.6 percent higher than the third quarter. Meanwhile, industry shipments grew 13 percent.

The reason is quite simple, really.

First, the data from the various marketing companies measures factory output, not sales to the end consumer. The fourth quarter includes the period October through December (can you say Chrismas?) which means that companies using channels typically fill them in November and December. The data do not show how much is still in the channel at the end of the period (were the channels stuffed?).

Second, companies like Compaq and IBM do quite a bit of retail sales, while Dell's sales are pretty much concentrated in the corporate arena. It is not unexpected to see a falloff of corporate sales during December and an acceleration of consumer sales during November and December. This suggests the need to seasonally adjust the data. For example, PC shipments for all US vendors increased 13% sequentially in the fourth quarter. But that would extrapolate to more than a 63% unit growth rate in computers -- clearly an overestimate.

TTFN,
CTC
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