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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: edamo who wrote (134853)	6/28/1999 9:56:00 PM
From: Mike Van Winkle	Read Replies (1) \| Respond to of 176387

edamo, I think that you have brought up some important points, however I don't view Dell's auction direction as flawed. I just realize that it was not a simple decision. I also am ignorant as to how Dell has addressed the issues you have raised, but here are some thoughts. 1." the signal that i get is that dell feels it can benefit from the sale of returned,refurbished units...this in itself indicates that they see rapidly eroding margins on new units.." Someone else suggested awhile back that third world countries might have a large market for machines like these. I have a profound respect for markets to absorb a spectrum of products. There might be some sales of software and peripherals to go with the used machines. 2.".what other industry/company that you know of has attempted such a concept. in the auto industry, the primary manufacture gives this task to the dealer or fleet wholesaler..." I believe Ford is seeing their lease returns as an avenue for additional revenue. They have been buying dealerships also. Nothing wrong with leveraging on your core business. 3...why dedicate time to an old product.... Could be many reasons, Do we know the details? In any event, Dell judges new efforts by a very high standard (200% ROIC I think is the going mark). 4..if "mikey" just spoke of the required "power" of computing going forth...then who is the auction directed at...consumer???? See 1. above for market thoughts. 5...the auction must be staffed, unlike e-bay which is "people to people"...this is "dell to people" How many are sold at one time? It could be lots of 1000. Maybe you have seen details of the auction, I haven't. 6.."to refurbish machines cannot be done by the dell process model, for you don't have an idea about the condition of the core until it is tested...what about quality, warranty...my question to you mike is this the direction a company with a strong process model wants to go in?????? " Dell already sells refurbished units, they may have perfected their process from that experience. Warranty may still be good, depending on how old the machines are. Extending the warranty could be an extra cost item. I think that Dell justifies all enterprises based on ROIC. If it meets their high standards, it is fine with me and will make our stock go up. One thing I am sure of is I don't have the information to evaluate what Dell does. I would suggest that their competitors don't either and that is how Dell would prefer to have it. It is fun to guess how they will make 200% ROIC on this new enterprise! Cheers Mike