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

To: JRI who wrote (150346)	1/5/2000 1:08:00 PM
From: jim kelley	Read Replies (1) \| Respond to of 176387

The stock price appreciation should be at least 40% this year. Actually the appreciation in 99 was approximately equal to revenue growth and less than earnings growth so the stock is somewhat undervalued now.

To: JRI who wrote (150346)	1/5/2000 1:31:00 PM
From: rudedog	Read Replies (2) \| Respond to of 176387

John - I try to always revisit my opinions on what these companies are really up to when new data comes in. DELL management surprised me last year by shifting their focus away from what I thought were some reasonable growth areas and back to their "core business". They are obviously among the smartest guys in the business and know a lot more about their operation than I do, why would they do that? I see a couple of possibilities. First, the move into higher-end enterprise components (especially the storage play) was dealt a blow by the acquisition of DG by EMC. DELL may have decided that the additional investment, or maybe just the additional hassle of figuring out all of the angles given the additional complication of EMC's strategy, made that investment less likely to pay off than a straightforward move into consumer business with a more leveraged enterprise play, perhaps including a closer partnership with EMC rather than DELL developing technology. Second, I am beginning to give Kemble's musings about IBM more credence - perhaps there is some arrangement which includes both IBM and Acer to do a consumer product, with DELL providing the configure-to-order and delivery capability. This would explain some of the moves which both IBM and DELL have made with Acer and could provide DELL with additional leverage in both relationships and expand their economic base for some of their infrastructure, while at the same time reducing their exposure to the lower margins and ASPs in the consumer space. In that light Vanderslice's move from IBM to DELL makes a lot of sense. It could provide benefit to all three companies. Third, DELL may believe that the continued growth of their commercial business will require the additional focus that the realignment provides if they are to maintain the efficiency and high service levels their customers have come to expect, and that such growth will change the economics for DELL. If they continue at their current rate for a while longer, they will have a market share which no company has enjoyed since the early days of the industry, which could enable them to maintain a higher price point for the DELL name. For years, IBM was able to maintain a 20% or better premium for similar products - they only started to lose share when their technology fell behind (such as when they failed to bring out a 386 based product, and the attempt to push users to the MicroChannel Architecture).