Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: rudedog who wrote (162262)	10/20/2000 12:45:04 PM
From: calgal	Read Replies (1) \| Respond to of 176387

Rudedog: Compaq Says Computer Inventory at Healthy Level By David A. Gaffen Staff Reporter 10/20/00 8:14 AM ET PC maker Compaq (CPQ:NYSE - news) was rising in preopen trading after the company said it was comfortable with its third-quarter inventory levels. One of the reasons stocks of PC makers have declined recently is due to perceived softening in PC demand. Dell (DELL:Nasdaq - news), for example, fell recently after it said revenues for the third-quarter will be lower than expected. Inventory levels are crucial because computer products become outdated very quickly (unlike, say, a company that makes brooms or toilets, which haven't changed significantly since Chaucer was alive). Compaq is expected to report its earnings results Oct. 24. Lately, shares were up 30 cents to $28 on 10,000 shares, making it the sixth-most actively traded stock on the Instinet electronic trading network. thestreet.com

To: rudedog who wrote (162262)	10/20/2000 12:46:50 PM
From: calgal	Respond to of 176387

Don't count PC makers out Technology analyst Mark Mitchell, who manages $370 million, said worries about a slowdown in PC demand are overblown, because the products will remain the primary work device. "I don't think the market is anywhere near over-penetrated," Mitchell said. "With pricing stabilized at around $2,000 a system and Intel's (INTC: news, msgs) introduction of the P4 processor on the horizon, we still looking for unit volume growth of about 15 percent next year." Mitchell also was bullish on wireless and broadband industries, which he believes are destined to benefit from the growing demand for speedy access to the Internet and information in general. Specific names on Mitchell's radar include Dell Computer (DELL: news, msgs) , Texas Instruments (TXN: news, msgs) and Analog Devices (ADI: news, msgs). www2.marketwatch.com

To: rudedog who wrote (162262)	10/20/2000 1:33:10 PM
From: calgal	Read Replies (1) \| Respond to of 176387

Business Week: October 30, 2000 News: Analysis & Commentary Commentary: How PC Makers Are Reprogramming Themselves Time was, Compaq Computer Corp. was the bellwether stock in the personal computer business. In the early 1990s, investors looked to it, software giant Microsoft Corp., and chipmaker Intel Corp. for clues about the industry's health. Then along came Dell Computer Corp., which sold millions of computers directly to consumers, first by phone and later via the Web. The upstart soon unseated Compaq as the hardware company to watch when taking the industry's pulse. No wonder Wall Street swooned when Dell, Intel and Apple each issued earnings warnings last month--sending their stocks south. Then on Oct. 12, consumer PC maker Gateway Inc. announced profits had surged by 35% while sales grew by 16%. ``The sky is not falling,'' said John J. Todd, Gateway's chief financial officer. ``In fact, the market is still solid.'' The Street breathed a sigh of relief and the following day pushed Gateway's shares to $52 from $43. Now, analysts are calling Gateway the prototype for the industry. ``Gateway is running with a model that gives them an advantage over everyone,'' gushes Chase H&Q analyst Walter J. Winnitzki. But is Gateway actually a new bellwether? Not really. The PC business used to be governed by fairly simple rules: Make millions of boxes as cheaply as possible and keep the prices falling for ever-faster machines. It was a model that worked because the market was young and customers weren't sophisticated enough to ask for anything other than the boxes that were being delivered. Today, the industry is far more fragmented. Dell is chasing business customers, Compaq is making headway with handhelds and Net access devices, and Gateway is focused on consumers. And buyers, many of whom own more than one computer, want a broader range of devices such as notebooks, handhelds and simple machines for surfing the Web. BEFORE THE FALL. At the same time, the market is far more treacherous. Nearly everyone agrees that sales of PCs are going to plateau in the next five years as the market becomes increasingly saturated, and will start falling soon thereafter. How companies fill that void will separate the eventual winners from the losers. Gateway's promising numbers make clear it's on to something. Its answer has been to concentrate on ``beyond the box'' revenues: software, training classes, financing, Internet service--anything that can be bundled with a PC to boost the margins on a sale. More than half of Gateway's profits come from such add-ons, compared with about 15% at major rivals, according to Chase's Winnitzki. Says Gateway CEO Jeffrey Weitzen: ``We're building a business that's about more than just the PC.'' Gateway is finding new ways to reach consumers, too. Since 1996, the company has opened more than 600 Country Stores and kiosks in OfficeMax locations--retail outposts where customers can test and order a machine. The stores also provide a platform for selling services such as classes, which offer margins as high as 90%, compared with the company's 23% gross margins overall. That formula may not be the prescription for every PC maker. But competitors are pursuing similar paths. Apple, for instance, is contemplating its own retail chain. And Hewlett-Packard Co. now sells its wares at kiosks in Circuit City, Staples, and Best Buy stores. Gateway was early to recognize that the business of selling PCs has changed, and will likely prosper because of it. But while investors should watch Gateway for ideas on how to run a PC company, they should not look to it--or any other rival--as a proxy for the industry's health. The PC market of old has become too fractured to be represented by any one company. By David Rocks Rocks covers the computer industry from New York. Copyright 2000 The McGraw-Hill Companies, Inc. All rights reserved. From Business Week, via AOL.

To: rudedog who wrote (162262)	10/20/2000 3:59:53 PM
From: kaka	Read Replies (1) \| Respond to of 176387

Rudedog, That can't be correct. Didn't MSD proclaim Dell is still growing at 2 times the industry rate?? Kaka

To: rudedog who wrote (162262)	10/20/2000 5:49:15 PM
From: D.J.Smyth	Read Replies (3) \| Respond to of 176387

rudedog. the IDC report is not out of line with current Dell projections either for this qtr. or possibly for the year. HP did come in first place. Dell second place in terms of overall growth. However, witness Dell's number of units worldwide vs. HP, 3800 (Dell) vs 2000 (HP), or NorthAmeria 2508 (Dell) vs 1400(HP). So, HP grew at roughly 35%, but it grew from a substantially smaller base. Dell's PC units grew at roughly 21% - not inconsistent with Dell's previous guidance. Dell's server unit growth, however, was strikingly higher than competitors. So, overall, Dell's growth remains solid and in tact. Despite any negative B.S. that others (Chase?) made try to spin on Dell, Dell remains the unit leader with overall sales growing considerably faster than the market average. Will the Street view the overall unit shipments as more positive than the PC growth rate itself? If they don't they're charlatans. Dell continues to grow its business faster than Compaq, Gateway and IBM. How can analyst an say that Gateway's model is the one to NOW to beat when Dell's model continues to produce stronger growth from a much larger base? Let's say it first. Dell remains number one in total unit shipments worldwide. If the market and analysts try to put a negative spin on these numbers on Monday, it represent just another crazy interpretation. You must also remember that these IDC numbers represent the three slowest months of Dell's calender year. The third qtr for Dell is backend loaded, i.e., sales in October are typically 40% stronger than sales in August and September. According to what we know Dell's October sales are keeping pace with these typical projections. It is not so true that you are comparing Dell's three slowest months against Cpq's, GTW's and HP's three slowest. HP and CPQ remain retail models and the slow summer months through direct sales are cushioned by their retail outlets. GTW's summer sales are also cushioned by their new retail ventures. Dell...possibly Dell should invest in a GTW kiosk in order to average out the drag. It doesn't negate the fact that Dell's slowest reporting period for their model type is always July through Sept. You add in a weak Europe and this compounds the problem. Nevertheless, through all this, Dell still grew their overall business at 30% greater than GTW, and grew it from a substanially larger base.