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

To: D. Swiss who wrote (162109)	10/13/2000 11:05:54 PM
From: Meathead	Read Replies (3) \| Respond to of 176387

Re: making up for it on higher margin non-box revenue. No kidding! I did a quick analysis of GTW's last 6 quarters. Not perfect but gets my understanding more in line with what's happening. It seems that high quality out of box earnings are indeed growing tremendously if you believe management's percentage-of-income numbers which is the only way they state it... they don't speak in terms of percentage of revenue. But it also appears that they are performing very badly in PC sales and gross margins -- no growth and severely declining gross margins. PC gross margins have declined from around 20% to 11% and unit growth has been stuck in the 1.2M to 1.3M range. They need the beyond the box strategy or they're dead. I suspect (know) the same is happening to Dell in desktops. The difference being that Gateway's beyond the box strategy is consumer centric whereas Dell's is enterprise centric. Here are the numbers. The btb (beyond the box) percentages came from GTW's quarterly announcements. Since OPEX has remained relatively flat as a percentage of revenues, gross income is used to show PC generated income vs. non-PC income. Notice that PC gross margins have declined severely and unit growth is relatively flat. PC 'Margin' is calculated by dividing gross PC income by top line revenue. Qtr--Gr_Profit--btb%--non_PC---PC---Margin--Units q299---421------10%-----42-------379----20%---1,003,900 q399---480------15%-----72-------408----19%---1,234,469 q499---548------20%-----110------438----18%---1,361,296 q100---528------25%-----132------396----17%---1,300,000 q200---498------40%-----199------299----14%---1,200,000 q300---584------51%-----292------286----11%---?? MEATHEAD