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

To: jim kelley who wrote (150421)	1/5/2000 5:54:00 PM
From: Patrick E.McDaniel	Respond to of 176388

For anyone, Dell is participating in the Goldman Sach's conference February 7-9th. What is it Dell will be able to say during the quiet period. Pat

To: jim kelley who wrote (150421)	1/5/2000 5:55:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176388

Jim, sounds like Rudy is correct: "Supply of key processors and motherboards was severely constrained, spotty and unreliable, particularly in our consumer sweetspot in the $999 to $1299 price range. We're in the process of fixing that issue now and will have news on that front in the very near future," said John Todd, senior vice president and chief financial officer. "Despite the sales shortfall, however, we enjoyed strong demand for our products. The launch of Astro, our new all-in-one PC, was a huge success, now accounting for almost 20% of our consumer product mix. We also did a great job maximizing AUPs and margins in a very tough environment." go2net.newsalert.com

To: jim kelley who wrote (150421)	1/5/2000 6:09:00 PM
From: rudedog	Read Replies (1) \| Respond to of 176388

Jim - Here's my reasoning, which I have posted before. Virtually all of the majors, DELL included, contract for a portion of "production" with the DRAM vendors. They do this on a cost-plus basis. This gives the DRAM vendor enough base production to do reasonable line scheduling without the need to inventory all that production, something they were reluctant to do given the overproduction of recent years. The DRAM vendors then gave very favorable terms for those contracts. This is much like what the airlines do - a certain amount of seat capacity is sold at low rates - enough to assure that at least the fuel and running costs are covered - then the rest is sold at higher prices. DELL became especially vulnerable because they happened to have contracts which expired in summer of '99, at a time when they anticipated that they would be shifting a substantial amount of 2H99 production to RAMBUS. As a result, they contracted for less base production of DRAM than they would have if the mix had not included RAMBUS. HP and CPQ did not plan on introducing any RAMBUS based products until late 1Q00, so they had no reason to change their mix. When Intel dropped the ball on the RAMBUS support chips and MB design, DELL was caught holding the bag and had to go on the spot market. At exactly that same time, CPQ and GTW closed deals with Micron (the memory one not the computer one) to increase their base production contracts. I suspect that one of the reasons DELL did their deal with Samsung on LCDs was to get some relief on DRAM. I believe that DELL was impacted for a shorter duration than the worst case scenario and was back in normal status early in the current Q, so I agree that they are not likely to show any effects in the current Q. But for the above reasons, I doubt that CPQ was much affected, and would be surprised if GTW had memory problems given their micron deal. IBM of course is a memory supplier so they could meet their own needs if necessary and presumably would not gouge their sister divisions. HP made some noises about memory problems but they showed impact more in their high end Unix lines, so I think the problem was really their Unix product offering being hit by SUNW, and not a supply problem at all. My info came from the supply side (i.e. discussions with some of the memory suppliers) so it is really conjecture but that was the basis for my assumptions.