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

To: J. Plesha who wrote (76954)	1/27/2000 10:28:00 PM
From: jim kelley	Read Replies (2) \| Respond to of 97611

DELL is not going to change their production model IMO. Batch manufacturing is part of the reason CPQ is having so much trouble making any money. Another reason is they have to carry inventory both in their factories and in the channel. DELL is not losing money this quarter, it is making less money than intended.

To: J. Plesha who wrote (76954)	1/27/2000 10:29:00 PM
From: Night Writer	Read Replies (2) \| Respond to of 97611

You are hitting on a sore subject. I think the dual distribution model is the best. Wall Street loves the direct only model. We have covered the advantages and disadvantages so many times that the subject has exhausted us. In short you are correct. NW

To: J. Plesha who wrote (76954)	1/28/2000 1:19:00 AM
From: Ted Foster	Respond to of 97611

<<Does anyone really understand the significance of Dell's shortfall?>> Dell said, that seeing Y2K slowdown in November, they tried to switch to high end consumer sales, using the newest "parts". These turned out to not be consistently obtainable. One could posit this: AMD switched production to higher end chips, forcing INTC to put newer products on the market before they were originally scheduled. This resulted in some glitches as well as yield problems at the higher speeds. Intel's Fabs were also producing motherboard and other products. The race to, and far beyond, 1ghz chips with accompanying higher speed sophisticated RAM, etc is very likely to keep inventories of the latest chips tight for the next few years. At a minimum, Dell will not be able to get the benefit of falling prices which also help the direct model. Another question is why the Y2K problem affected Dell so much and not CPQ? Especially since it wasn't supposed to affect Dell, per both Mike and the analysts. ted