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

To: John Koligman who wrote (91145)	5/10/2001 10:51:31 AM
From: MeDroogies	Read Replies (1) \| Respond to of 97611

Financially, yes, Dell is in a better position. However, I suspect that since Dell sells more, and is probably cutting their margins by a far greater degree, they will burn through cash at a faster rate. In addition, Dell is less well positioned to "bundle" PCs with larger scale deals involving servers and services. This means that while they can own the consumer PC market, and can do well in the corporate market, there is a very large sector they are locked out of (for all intents and purposes) which is the sector that is still getting decent margins...and probably will for some time. CPQ will take it on the chin in the first round, but as I've said before, judging MC this early on is a misguided tactic. Carly looked like the second coming at HWP early on. How many people are claiming that now? As I've said, there are differences between sprinters and marathoners. MC is looking further down the road and positioning for a long term situation. MD, no doubt a marathoner at this point based on his successes, is now focussing on a short term situation. That, I feel, will be his undoing. CPQ once owned the market share. As we see, market share passes hands frequently. For Dell to make a play based on market share may be good in the short run. But somebody will take it from Dell in the near future. So is it worth sacrificing short term margins for share? Something is afoot. IF MD is truly a visionary, he has something else up his sleeve that he is preparing to engage in....and the price war is the first step in that strategy. What it would be...I don't know. Certainly, it would have to involve some form of merger/partnership with a large server/services concern............but I don't see anything like that happening soon - does anyone here? In the end, I think the price war is a means MD burning off an oversupply of chips and components that he probably has on hand...