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To: nihil who wrote (99502)	2/18/2000 11:32:00 PM
From: rudedog	Respond to of 186894

nihil - re: (1) Dell's (and white box makers) destruction of CPQ, IBM etc. margins and profits. In 2000, it is CPQ who is destroying DELLs margins and revenues by cutting the ASP of the commercial desktop in half. CPQ is currently at a billion dollar run rate on iPaq, which is a $499 commercial desktop based on 500MHz celeron (with a slightly higher priced PIII also available). In other words, CPQ thinks they are on plan to sell 2 million iPaqs. I have done a fair amount of discussion on this topic on the DELL board... DELL will have no choice but to follow in that space or risk losing revenue and share to CPQ. At the moment DELL enjoys a commercial desktop ASP of more than $1600... if 20% of those products go to $500, what does DELL have to do in unit volume to make up the revenue? And if net margins on those products are 4%, what does that do to overall DELL margins? For CPQ, of course, a 4% net margin would be a big improvement over their current negative net margins... From Intel's perspective, that works just fine - the OEMs have a big incentive to drive more units, the boxes still contain Intel processors and chipsets... and re: Any school boy can put together a cheaper computer than he can buy at CompUSA There is no way an individual can get even the parts for the price of an iPaq - it takes commitments on components in the millions to get pricing to make a product like that work... and then the individual needs to spend $200 for Win2K at retail. Go out and get your best price if you think I'm kidding about that. 500MHz celeron, 64MB RAM, 4.3gb disk, CD ROM, Motherboard with USB, video, 10/100 ethernet, power supply, case and trimmings, keyboard and mouse for $300? You can maybe get the parts in a bag for that if you really know how to scrounge, or you can get a fully integrated working unit with Win2K and a bunch of applications installed, and a warranty... which makes more sense?