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To: ehopper who wrote (5565)	6/15/2000 2:37:00 AM
From: Gus	Respond to of 34857

place these higher priced components in a more efficient technology hence CDMA. Huh? Please elaborate. However I would argue that since parts shortages are cyclical and usually short term (1-2 quarters), and since manufacturer's forecasts have relatively firm production forecasting (1 year in advance typically. 1) If I remember correctly, Dell uses rolling 3-6-9 month demand forecasts that provide visibility to its top tier suppliers. I think it is in the process of extending that demand visibility to its 2nd and 3rd tier suppliers. Meanwhile, it has settled on a system which allows them to pass through component price increases to their customers. One year forecasts may be too rigid especially in wireless where network infrastructure sells differently from handsets. 2) Optoelectronics and wireless are soaking up a lot of the available capacity in the global electronics industry. Estimates of the handset replacement rate keep on being revised upwards and that increases the stress on those forecasting models so the cyclicality is difficult to guage at this point.