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Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: D. Swiss who wrote (7291)	8/18/1999 6:53:00 PM
From: Bill Jackson	Respond to of 8002

Drew: That is good as margins are greater on that kind of work. I am afraid that they will get squeezed between a rock and a hard place. As system prices drop and margins drop their operating costs become a larger and larger % of the total At some point the unit cost(whichdrops) + their costs(which is constant) exceed the sales price. When they try to buy cheaper and cheaper stuff they get injured by RMA costs and reputation is harmed. Gateway has been struggling with this for some time and as the average selling prce falls later on this year I feel they will not be able to cope. Bill