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

To: Chuzzlewit who wrote (148466)	12/3/1999 6:02:00 PM
From: TigerPaw	Respond to of 176387

the project should be undertaken regardless of profit margins. A volume product can also be worth producing if it prevents a competitor from somehow turning the segment into a cash cow. WebPc may mean that e-Machines and similar never get a foothold, from which they can work up the chain. TP

To: Chuzzlewit who wrote (148466)	12/3/1999 7:51:00 PM
From: rudedog	Respond to of 176387

chuzz - finally a bit of sanity. 4% is OK, 8% is OK, 25% is OK. 1% is OK if your in the grocery business... DELL's consumer business is clearly incremental and they appear to be positioning and pricing to avoid cannibalization of their low end commercial lines. I don't know how I let myself get into these things...

To: Chuzzlewit who wrote (148466)	12/4/1999 12:19:00 AM
From: Mike Van Winkle	Read Replies (1) \| Respond to of 176387

Chuz re: Focusing on margins is really pointless. This is true for Dell because they don't build the product until the actual user orders it and they have payment in hand. For manufacturers that indirectly sell to the user, inventories are required (either in their own warehouse or the retailer's warehouse). To manage these inventory levels, forecasting is required. The problem with forecasting is no one knows the future. So, small margins are ok for Dell as they do not need to forecast, but for those manufacturers that do require forecasting, small margins will inevitably result in losses. That was the under belly of the 4% margin for CPQ. Sorry for the long winded explanation. Mike