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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: DRBES who wrote (75704)	10/17/1999 7:17:00 AM
From: Bill Jackson	Read Replies (1) \| Respond to of 1572374

DRBES,re: "I suspect that IBM has done an analysis..." IBM has a tendency to think about it, send it to committees and then revise it and then miss that market and start again. IBM has a 'should cost' purchasing model. Whatever they buy they analyze in-house to see what is should cot to make it and they they allow the maker some profit and see if they can get that kind of a quote....if not they make it themselves. Most major component fabricators know this and give the leanest quote they can for the volume involved because they know that if they get too greedy, well IBM will make it and may well enter that market and compete with them. I suspect Dell is similar and the pair probably get down very close to the commodity cost of an item, so there will be few items that one will get for 5% less than the other. IBM though makes memory and hard drives and that is a crucial advantage. I suspect that IBM will emulate the Dell model very closely. The Dell model has been fine tuned very well and if IBM attempts to depart from it, to make a "better" model, they had better think twice if they have hopes of beating Dell. Remember Dell has far lower cost manufacturing employees than IBM, so the only sticks IBM has to beat Dell with are memory and hard drives and Dell has the counter in lower paid employees.....will that endure if we get wage inflation? Bill