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

To: D.J.Smyth who wrote (145277)	10/19/1999 11:15:00 PM
From: rudedog	Respond to of 176387

Darrel - Good post. When DRAM price dropped below production costs, CPQ was in fact disadvantaged - they had to take the contract minimums before they could go after the cheaper spot market products. The current situation does reverse that disadvantage. I assumed that DELL was also looking for DRAM from Samsung but in the seller's market we have at the moment, doubt that there will be a sweet deal on that without some quid pro quo somewhere. I sure hope you are right about the stock price. 30% revenue growth will take DELL to $44B in 2 1/2 years, 40% would get the $50B number. I personally think the 30% rate is more likely - the hill gets much steeper from here on out and DELL will need to do more than they have done this year just to stay on the 30% curve. Still, I can live with 30% if the stock price tracks the revenue growth.

To: D.J.Smyth who wrote (145277)	10/20/1999 10:40:00 AM
From: Mike Van Winkle	Respond to of 176387

Darrell, thanks for the insightful post. re: Nevertheless; current DRAM pricing is an aberration. Dram producers know that in order to keep the PC supply chain running they MUST deliver more and more memory for the same cost, or the same memory for lower and lower cost. Without this phenomenon, they don't expand and, frankly, the PC stagnates. And we know the PC, relative to current and proposed designs, is not stagnating. With current torrid PC unit growth multiplied by the forthcoming Microsoft 2000 operating system increased memory requirement, then a sudden reduction in DRAM supply from the tragic Taiwan earthquake, it is no wonder that "current DRAM pricing is an aberration." As with making deals, Dell has a different business model than their batch manufacturing competitors, so their contracts have to be different. However, if their competitors are to compete they will have to move to the same type of contract that Dell has with its suppliers. Price is only one issue in these contracts as it relates to cost of manufacturing a PC. It is easy to miss the business process requirements unless that is the way you think. Mike