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Technology Stocks : Dell Technologies Inc.

DELL 128.70

+5.0%

10:43 AM EST

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To: Knighty Tin who wrote (103380)	2/20/1999 4:12:00 PM
From: jim kelley	Read Replies (1) of 176387

Hmmm.... I thought European unit growth was headed up. Well I guess we need to specify what time periods we are talking about. APJ unit growth should be well up this year and I would expect that Europe as well will be up. In the US unit growth rate is expected to be the same as last year. Most of this is being propelled by the Internet expansion. You can make the argument that ASP will be decreasing but I will argue that component prices are stabilizing and the decrease will not be as rapid. Also, the growth rate of the subzero market is slowing dramatically. The channel stuffing by the indirect last year also caused increased pressure on the ASP's because of their need to dump rapidly obsolescing inventory. It appears that the stuffing this year is maybe half that of last year. Thus the ASP pressure will be reduced due to that factor. New product releases by INTC should spur demand from knowledgeable users and DELL should benefit the most short term because their pipes are clean. While I have not done an accurate calculation, it is fairly clear that the dollar value of the PC market has been declining for a couple of years due to the AMD competition and the development of the subzero market. Evidence of this is seen in the earning of companies like IBM, CPQ, Packard BELL , etc. The total dollar value of this market will probably INCREASE this year. In any event, DELL is a special case within the PC market and I expect them to continue to prosper with substantial revenue and profit increases. So it looks like a stock pickers market within this product segment. I am making money and will my interest in this segment is proportional to my profits. JK

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