<<1. Can a company continue to exist if it's not making any money on the products it sells?>>
Not sure what relevance this has to eMachines since they claim they are now profitable.
<<2. Do you believe that consumers are "quality oriented?">>
2. Consumers are not solely quality oriented. There is a trade-off between quality and price for a large number of consumers, which is why the CR best buys traditionally are not the highest-quality, most expensive items.
<<3. Do you think that large companies are going to purchase equipment with the impression that not only are they of a lower quality, but technical support systems have not really been established.>>
For the most part, you're implicit position here is correct. However, as I mentioned elsewhere, eMachines is not positioning itself in the large corporate marketplace. Period.
Let's make clear what I believe is one of the battlegrounds. As expressed by Michael Dell on several recent occasions, DELL sees the small business area as a major growth vehicle for pc sales in the future. Small businesses are beginning to gravitate towards lower-priced CPU's based upon Intel's Celeron processor. In that field, the DELL line, IMO, is markedly more expensive than items offered by IBM, CompUSA, Hewlett Packard and eMachines. That really has been my comment here for the past week or more.
Now, you can believe that DELL will continue to price its Celeron line at a premium to the market and do well, or you can believe that at some point they will respond to a competitive threat with better relative price/performance systems and doing so may or may not have a small, dampening effect on their overall growth rate. I don't have the answer. I believe that DELL is monitoring the situation carefully and trying to determine what to do. But that's about all I can say about this matter with reasonable certainty. |
