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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: JDN who wrote (76853)	1/27/2000 8:23:00 AM
From: rupert1	Respond to of 97611

JDN: If I may interject. COMPAQ's iPaq is about half the December standard price of commercial PC's and it is more powerful than what you could get for that standard price. So DELL has a big problem competing with the COMPAQ iPaq on price and power even if DELL had no rising component or supply cost problems. The margin problems you highlighted have caused a reduction in supply of consumer PC's to the market from some players, including some white box makers, and given the increasing demand in international markets, consumers in the 4Q have already been conditioned to expect prices to remain stable or to rise. While this may eventually lead to growth in the less expensive web-box type of appliance, COMPAQ is postioned to grow in that market, too.

To: JDN who wrote (76853)	1/27/2000 8:45:00 AM
From: rudedog	Read Replies (1) \| Respond to of 97611

JDN - DELL's revenue forecast does not explain the drop in earnings - it would cover only about half, even at the lowered margins they showed last Q. And the unit numbers do not explain the revenue shortfall - only about half again. The story just does not add up. I agree that their model is putting a squeeze on them that won't let up unless we see a reversal in market conditions, but that is only part of the story. I expect that DELL management will need to do a LOT better at explaining the problem and give some pretty tight guidance to get any confidence from investors...