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

To: GVTucker who wrote (165441)	5/18/2001 6:00:45 PM
From: D.J.Smyth	Read Replies (2) \| Respond to of 176387

GV, you're right. Conspiracy it is. Those other items are history. Since we know that Dell the company sucks we must start from a presumption of sucking. Of course, we must eliminate the fact that Dell makes more earnings per $1 in revenue than any of its competitors on its hardware sales. That its service revenue is growing faster than its competitors. That its marketshare per units is increasing. That Dell stated those revenue projections for next quarter were on the conservative side; a target they felt they could beat, at worst, meet. We must not factor in that Dell's enterprise division is growing faster than its competitors, even though unit prices are dropping. Forget that Dell's entry into thin clients will prompt replacement of earlier branded servers at an increasing rate. That increased broadband applications will prompt increased server replacements for 2002 (per Cisco). That increased wireless data applications through the internet will prompt entirely new turnkey applications and service contracts and visions. Forget about Microsoft planning the largest single advertising campaign in its history relative to XP (as compared to former versions) coming in October. Instead, award QCOM with 90% of the marketcap of Dell because, going forward Dell can't compete in the wireless sector as can QCOM and their buddy, Compaq. Service wise, Dell can't compete with Compaq either. Dell certainly can't compete with IBM, even though Dell is part and parcel marketing IBM services. Now that Dell is the leader of the box sector, they can never compete, with their model, in the storage arenas. Storage applications, don't you know, are unlimited, according to EMC's CEO. Give EMC a 35% premium to Dell's marketcap. Forget that 80% of Corporate America continues to run, internally, on unconnected and disparate operating systems that don't speak to each other, that IBM's vision of connecting and replacing these systems with singular formats is right for IBM but wrong for Dell. Even though Dell's entry into the service and networking worlds is yet nascent, and they are growing at 2X the rate of IBM's same vision, Dell's stock price should be punished more due to economic factors. These factors will never turn around, by the way. Dell is lousy at software application for the Corporate world as well. The U.S. Navy was really stupid to give dell their contract. EDS doesn't know what they are getting into. Forget about the fact that the replacement cycle is moving away from 32bit systems to 62bit; the expected single largest replacement makeover in computing history. We must forget that a larger number of replacement sales are coming from the switch to laptops. Don't compare Dell to IBM either. Since 1995 IBM's hardware sales have actually decreased, and remained essentially flat at around $30 billion YOY. yet, during that same timeframe IBM's stock price has gone up 400%. Since 1998 IBM's stock price has doubled. IBM's overall revenue has increased but slightly since 1998. Dell's revenue since 1998, though, has nearly trippled ($12 billion in sales to over $33 billion) while Dell's stock price has remained essentially flat. A tripling in sales since 1998, a flat stock price. It has moved from #8 market share to #1. Yet, don't believe Dell's vision for the future regarding replacement sales and how that will affect the overall leader first. They are lying regarding their vision for their increased marketshare in the Enterprise sector. Dell's Enterprise sector consisted of 9% of $12 billion in 1998 sales, or a little over $1 billion. Today the Enterprise sector consists of 20% of $34 billion in annual sales, or nearly $7 billion annually. So, in a matter of 2 1/2 years, Dell's Enterprise division has grown nearly 700%, yet it's stock price has remained essentially flat. The market wants to see Enterprise sales and service growth. They're tired of the PC. Dell delivers, makes the shift from PC centric, but the stock price is worth no more than it was in 1998. Again I say, buy EMC, give it a 35% premium to Dell's stock price even though Dell states that it can enter the storage market in much the same manner as it entered the PC market. It's taking two quarters longer than expected, so give Dell a stock price less than what it was trading at in March 1998. Again, don't compare Dell to IBM, because Dell's service revenues actually increased more percentage wise than did IBM's the past few quarters. The market just loves these service revenues, but the PC is dead. The market tells us that the PC is dead and service is king. It states that networking gear and application is where you need to be. Both of these areas are strong growth areas for Dell, but from a base that was nearly $0 two years ago. The average price of a PC since 1998 has dropped by 70%, yet Dell's unit sales have increased by more than 250%, increasing Dell's overall sales from $8 billion to over $18 billion today. The suck Dell has lowered it's expectations for PC revenues for next quarter, even while expecting total unit sales to continue their upward climb for the remainder of the year. Service and Enterprise revenues continue to make-up a larger part of Dell's overall revenue; but that doesn't count because the PC is dead. Forget that the more PC units that are in the market, the increased chance there is that replacement cycles will also increase and continue. If it is not a conspiracy, then, what the heck is it? I totally agree with you GV.