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

To: Sig who wrote (144392)	10/12/1999 12:29:00 AM
From: rudedog	Read Replies (1) \| Respond to of 176387

sig - re: you take care of us this fall(with lcd's) and you get $8.5 bil guaranteed future business". Maybe - but a lot more likely scenario is Mike went to Samsung and said "sure would like some of those LCDs you've been selling to CPQ" and Samsung said "Hmmm - where were you when we were trying to jump start this business and you preferred to go with the Taiwan vendors? Only CPQ came to us with a deal that let us get into the game. But no hard feelings - all you need to do is guarantee 8.5 BILLION over the next 5 years so we can really put our boots into those other LCD guys..." Still a good move for DELL but this, along with the IBM component deal, moves DELL a whole lot closer to the CPQ purchasing model. But as I said on the CPQ thread, it was not component prices which hurt CPQ, it was the aging of those components in assembled products in the channel when prices for raw components were falling. CPQ had (and probably has) the lowest purchase price for those components in the business. But with 12 weeks of Channel aging working against CPQ, DELL could pay more initially and still win, since they only owned the parts for a day or two. When the landscape changes, DELL is not too proud to grab a winning play from CPQ to maintain competitive component prices and assure supply. Still, one wonders what the long term effects on their business model will be.