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

To: rudedog who wrote (151240)	1/13/2000 11:15:00 AM
From: JRI	Read Replies (2) \| Respond to of 176387

Rude- It was late when I posted, and I must have had a major brain cramp on the total PC unit number (I 'spose I was thinking we are near 125m...)...To simplify: The market should continue to grow at 15% p.a. units for a while.....Granted, revenue per box is shrinking (15%-20% p.a)....but, in fairness, you would recognize that costs per box are also shrinking (something bears, not you-but bears, LOVE to leave out)...so, although it is more difficult to make the revenue number (with such metrices), profit per box is not shrinking at (near) the same rate...... in any event, I don't argue at all with your premise about shrinking ASP (except)...that I think this year gives Dell the opportunity (and, surely, they will...given their fast-follower strategy) of having a competitive box vs. the legacy-free crowd....it is hard to imagine Dell will leave any significant competitive gap in the corporate space go on for long....Due to its cost structure, Dell is still in the driver seat... Yes, based on your number, Dell will have to grow "other" revenues (outside PCs) at least 25-30 billion (p.a) within 5 yrs to maintain 33% revenue growth rate.....I am trusting that, in addition to server, "out-of-the-box", storage..etc....Dell will make a few nice-sized acquisitions...they are sitting on a mound of cash..which (cash) will only grow quickly the next couple yrs.....AND..that Dell will also figure out some additional growth ops..tangent to current business ops.....It is clear that they will get no where near that target (33% p.a revenue growth) on boxes alone....They know that.... Final note...if Dell is going to miss on their 5 yrs. targets...it wouldn't surprise me if the miss comes on the revenue line (28%, 30%?)...HOWEVER, give Dell should face LESS COMPETITION in the core PC biz (vs. the yrs. '95-99) and Dell will have non-PC revs. as a larger% of total revs as time goes on....margin, I think, should get better.....so, Dell's growth rate (revs) could slow to below 33%, but earnings/EPS could continue to grow at 33% or above....(As you know, Dell earnings/EPS has almost ALWAYS, since I've been following the stock, grown faster..by a good bit...than revenues).. I think you would agree that, of the 3, EPS/Earnings more significant than revenue (growth)..