Excerpts from MD on his interview on 710 am radio at 2:00 pm in Philly with "The Dolan's":
"Dell will build about 11M computers this year."
Suggests to me that if forward revenues are $25B, the implied ASP is $2,272.
"The marketplace outside the U.S. have only begun to enjoy computers."
Suggests to me that further penetration of foreign markets and the success in gaining share in those markets will be critical to its success
Mistake he made in 1989 regard to managing inventory caused Dell's growth to slow. In 1993, ventured off to sellin in retail stores (including Walmart)but lost the ability to build the product to order, had a dealer's markup, and couldn't handle the support.
"You're Y2K compliant for any DELL machine bought in the last 3-4 years. However, if you're running 7 year old software, you may have some difficulty."
"Some of the Y2K hype borders on the ridiculous."
"We're not too fond of the term 'mail order'. We prefer the term 'direct from the manufacturer."
"The concept of a store (i.e. Gateway Country store ) is a rather expensive way to serve the customer base."
"Haven't seen too many customers who say 'I want to see and touch what I'm buying before I buy.'"
"We'd have to charge our customers more if we had stores. But we're still growing about 4x faster than Gateway."
"The majority of our customers are people who already understand computers and want the best service, the best products..."
"The economy grows at 3 or 5% a year. The industry grows at 15% a year. A company like ours grows at 40-50% per year."
"We hired about 9,000 people last year. About 28,000 people work at Dell. We're always looking for great talent in all areas..."
Suggests that SI threaders "Mohan, Kemble, Drew, Voltaire, Edamo, Prichard, Long on Dell, Atbraves, and Stockman Scott" give him a call to work as his personal press advisors ;-)
Also suggests that William Michaels act as his personal investment advisor
Q: How do you deal with Wall Street?
"When you have a co. that grows it earnings at 55% and grew its units at 3.5x the market, it's pretty clear that we're doing well as a company. But the some analysts keep raising the estimates, and sometimes it gets out of control."
"Some analysts guess lower than we might perform. Others guess higher than we might perform."
Q: What shortfall comes from economic turmoil overseas?
"None, really. Europe was up about 40%. In every market in the world, we grew at a strong multiple of the market's growth rate."
"If you look at customer satisfaction, this is really a key point...last year we won for both desktops and notebooks. Any customer satisfaction survey in the industry shows Dell as the leader."
"We're leading in product & technology, service, and economics..."
Q: What's the philosophy at Dell that keeps the employees from throwing monkey wrenches into the computer?
"It's easier now than before when we didn't have processes. We now focus on the customer experience: did the machine arrive on time, what's the reliability in the field, how did we serve the customer, how do we handle service requests? We incentivise every employee around the customer experience."
"We had 25M visitors last quarter to Dell.com, our on-line store."
(commercial break about homeopathic remedy for ED)
Lack of sexual energy can result from too much caffine, stress, irritating margin calls, and shorting Dell...
(interview resumes)
Q: Is it an anlyst's tactic to knock the stock price down, force us to sell, and then pick it up at a lower price?
"That's really a better question for the analysts than for me. Certainly, we'd love for the price of our stock to go up, but we really focus on customer satisfaction, new products, growth, etc. and if we do those things well, the price of the stock will take care of itself."
Q: Are there plans to be compatible with Mac in the future?
"I think the thing that is happening on all Mac software is that it is being imported over to Windows and certainly, you can run those coverted applications on our products."
Q: Would there ever be a demand for an operating business other than Windows (i.e. we don't do windows?)"
"Well, we sell our machines with a variety of operating systems, Windows, Linux, OS2, etc. but the number of people using a system other than Windows is still pretty small percentage of the users out there."
Q: Should we care about the Microsoft litigation?
"You might care about it if a company can't improve its own product. But we let the customer decide what they want to buy. Most customers want to buy our computers with Microsoft software."
Q: What about the cry from the analysts about selling PC's for less than $1,000?
"We try not to do things that are not profitable in our company. But people tend to buy the more fully featured machines. I kind of liken the $600 computers to the Yugo: they may look like a PC, initially drive like a PC, but they're not going to last very long."
(End of interview)
I'd be interesting in hearing any comments on this interview. Ooops, have to run. Doorbell is ringing. I bought a $25K French Hugenot chandalier from my Dell trading profits two weeks ago, and they're here to deliver and install it. Thank you Michael Dell.
Best regards,
Mark A. Peterson |
