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

To: Sig who wrote (144403)	10/12/1999 8:45:00 AM
From: rudedog	Read Replies (1) \| Respond to of 176387

sig - CPQ will eventually get their act together but I'm not predicting when... they have some hard problems to solve. Just watching and waiting. I am in at a very low basis so I can afford to just wait. Others are not so lucky. DELL is certainly on a tear and it looks like a great near term story. What I am beginning to wonder about is the volume and extent of the long-term supply contracts they are entering into - combining the Acer, IBM and Samsung deals, they have locked in some big commitments. This clearly signals a change in DELL's model. Some of this is no doubt in preparation for their foray into consumer PCs. As I have pointed out earlier, the consumer business is a lot different than the BTO business DELL has been in, and benefits from large production runs where component costs are minimized and production efficiency is maximized. The contracts they are entering into could all be in support of that move if their plans for that part of the business are large enough. This would give the "traditional" DELL business the benefit of lower component costs on average, using the consumer volume to create the supplier relationships, much as CPQ did in the mid-90s, while still leaving the main business free from excessive contract liabilities.