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

To: kemble s. matter who wrote (158217)	6/28/2000 3:27:00 PM
From: calgal	Read Replies (1) \| Respond to of 176388

Hi Kemble! OT: I thought this was funny! I like the Dell Direct model better!:)Leigh biz.yahoo.com Wednesday June 28, 9:37 am Eastern Time Forbes.com IBM Takes Another Shot At PC Business By Lisa DiCarlo After more than five years of retooling, restructuring and retrenching, IBM's Personal Systems Group swears it has finally made the right changes to sell large volumes of computers profitably. It's a familiar story. IBM (claims to have taken extraneous time and cost out of procurement, fulfillment and distribution of PCs, while increasing the percentage of systems it sells directly to customers. It's something IBM has been talking about at least since G. Richard Thoman, recently ousted as CEO of Xerox (NYSE: XRX <http://finance.yahoo.com/q?s=xrx&d=t> - news </n/x/xrx.html>), was division chief of the Personal Systems Group (PSG) in 1994. Since then IBM has implemented sweeping built-to-order and other manufacturing techniques to be more efficient. Has IBM really done it this time? If it hasn't--we won't know the progress until IBM reports earnings in July--this is certainly its best try yet. IBM has spent more than $150 million over 18 months installing complex supply-chain management software from SAP America and i2 Technologies (Nasdaq: ITWO <http://finance.yahoo.com/q?s=itwo&d=t> - news </n/i/itwo.html>), streamlining logistics and building up an e-commerce infrastructure on shopibm.com. It's a big commitment for IBM to make to PSG, considering the group has lost more than $1.5 billion in the past nine quarters. ``This is a very important journey we started in October,'' says Ralph Martino, vice president of strategy and marketing at PSG. ``There's a new-thought leadership. We're changing everything.'' IBM has changed a lot. It rebranded its corporate PC line--it's now called NetVista rather than the medicinal sounding 'PC300' series; it's revamped the ThinkPad portables and beefed up its direct sales, which Martino says have grown by a factor of ten since last year. ``Were delivering proof, not just a concept,'' he says. IBM says the overall cost savings since last fall have been dramatic, but Martino couldn't quantify the savings. He did say IBM sold almost 20% of its PCs over the Internet in the first quarter, and the company has its sights set on 35% of sales by year's end. And 1,000 of IBM's big customers have customized, personalized e-commerce sites for a direct link to IBM. Dell Computer (Nasdaq: DELL <http://finance.yahoo.com/q?s=dell&d=t> - news </n/d/dell.html>) pioneered this concept two years ago with its Premier Pages, and Hewlett-Packard (NYSE: HWP <http://finance.yahoo.com/q?s=hwp&d=t> - news </n/h/hwp.html>) has something similar. One thing that is working in IBM's favor is the radically changing definition of a PC. Since its debut in the mid-1980s, the PC has been a boring-looking beige box running software applications. A few years after the Internet became accessible to the masses, PCs got funky-looking, and no longer are productivity applications like word processors, spreadsheets, and databases the main reason people buy PCs. Today, Web access drives PC purchases, at least for home users. That's resulted in a wide range of Web-ready devices like cell phones, Web tablets, pagers and several variants of handheld computers. Companies including Intel (Nasdaq: INTC <http://finance.yahoo.com/q?s=intc&d=t> - news </n/i/intc.html>), for instance, sell a machine just for e-mail. This is a welcome shift for IBM, which tends to do better in markets where it can leverage the technologies from other divisions and its size and breadth of partnerships. So, IBM is changing shape to fit the market. It quit selling PCs at retail last year because it was enormously unprofitable. The retail strategy now is to partner with companies like BellSouth to give away small computers and charge a monthly fee for wireless Internet access. ``This way, we're reaching customers we'd never otherwise reach. We're taking a different route to customers. It's a business model that didn't exist 18 months ago,'' Martino says, adding that the company has ``every expectation'' PSG will be profitable this year. IBM selling PCs profitably--what a concept.

To: kemble s. matter who wrote (158217)	6/28/2000 4:27:00 PM
From: Mike Van Winkle	Read Replies (1) \| Respond to of 176388

Hi Kemble re: What specific component "shortage"? That would be nice to know. On the other hand, perhaps TTOSBT is right, that Dell is justifying raising prices, as that is the antidote to a shortage. Or maybe Dell is steering customers to higher end processors. Best, Mike