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Technology Stocks : Dell Technologies Inc.

DELL 133.78

-0.1%

Nov 14 9:30 AM EST

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To: gary d. who wrote (119518)	4/21/1999 8:33:00 AM
From: Mohan Marette	Read Replies (1) of 176387

CPQ-I think I got it. Gary: I think the main problem facing the industry is cut throat price competition resulting in eroding margins,this is particularly so for Compaq. Looking at Compaq's results a few facts become apparent which is causing them untold misery. 1)YOY revenue seems quite healthy,but it looks like a lot of it is coming from consumer business,probably the sub 1000 segment.They also said sales of high-end products are way below target. We also know that Dell is gaining market share in the high-end segment while their's is eroding. 2)Cost of Sales for Compaq is way up at +48% from a year ago. 3)SG&A jumped a whopping +80% or so if I am not mistaken from a year ago. 4)Gross margin eroded +2% from previous year. Something smells fishy in Houston for sure. On top of all this we also know HP and IBM are having problems with their PC business and none of them have been successful in competing against Dell in E-Commerce or for that matter even Gateway to some extent.

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