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 : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (90994)	5/1/2001 12:17:53 AM
From: Jimbo Cobb	Read Replies (2) \| Respond to of 97611

thestreet.com Dell Senior Vice President Tom Meredith was not coy about his company's new enjoyment of the low-end market. "We had two choices: either drop margin and deliver roughly equivalent earnings while gaining share, or maintain margins at a historical level, not see a share gain and still not hit earnings," Meredith said. Who needs the luxurious margins of the high end? Meredith reiterated Dell's plan to take market share by charging lower prices, sacrificing margins for business in this slow market for PC sales. Dell's decision is standing up to the test of time as chip powerhouse Intel (INTC:Nasdaq - news) has joined the low-low club with its new Pentium 4 chips selling for bargain prices. On the same day as Meredith's presentation at the J.P. Morgan H&Q conference, Dell slashed prices on certain desktop systems by 20%. "Why would we do that?" Meredith asked rhetorically. "Because we can." He had some nasty words to say about competitor Compaq's (CPQ:NYSE - news) opposite strategy of going toward the high end. "Michael Capellas says he's renting market share," he says. "While he's renting market share, we're buying it." ** Meredith finally tightened his lips when asked about DRAM prices and whether Dell expected to see prices go up. The former Dell CFO chuckled and replied, "Why should I ever tell you I'm going to be paying more? The minute I say DRAM prices are increasing, my suppliers are going to be on the phone telling me the price is up. It's like an IQ test."