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

To: GVTucker who wrote (165663)	6/1/2001 10:30:55 AM
From: John Koligman	Respond to of 176387

CHINA, Jun 01, 2001 (AsiaPort via COMTEX) If Dell Computer wants to succeed in China, analysts say the direct seller must figure out how to change the buying habits of consumers in the world's thirdlargest PC market. Even Dell's focus on removing the middleman may not produce prices low enough to attract customers in big cities such as Beijing, where percapita annual disposable income is about US$1,120 (9,300 yuan). Zhou Pei, for example, is a 24yearold who handles imports for Geologistics, a SinoUS cargo venture in Beijing. In most respects, she's a typical whitecollar consumer: She likes going to the movies, wearing the latest fashions and playing computer games. She bought a home computer mostly for email and Internet surfing. It wasn't a Dell. "Dell is too expensive," she said. That kind of thinking doesn't worry CEO Michael Dell, who said he plans no change in his company's marketing strategy as it expands into China's consumer market from businesses and institutions. "We've focused in China on the high end of the market," Dell said in a recent interview. "You'll see us expand that into the consumer market as well." Some analysts who don't share his optimism say the world's No 1 PC maker will have to change its marketing tactics if it hopes to compete against local rivals such as Legend Holdings, China's largest PC maker. "If Dell wants to expand in the consumer business, it will have to build a lot of retail chains all over China," said Johnny Wong, an analyst with Dresdner Kleinwort Wasserstein in Hong Kong. "Legend is starting to set up franchise chains." In a country where fingers don't do the walking and consumers like the handson approach to choosing merchandise, selling computers over the phone may prove problematic for Dell. "I will go to a computer shop to buy the PC I want," said Liu Lei, a Beijing resident. That will be a Legend computer, she said. Liu has never heard of Dell. In addition, China's transport and distribution system sometimes takes longer to get a package across town than across the world. Dell's factory is in Xiamen, a coastal city in southeastern China that is 1,100 miles from Beijing and 700 miles from Shanghai. Legend, which sells only in China and has about onethird of the market, has no such logistical problems. Through its nationwide retail store chain, it sells Pentium III computers for about 8 percent below the US$1,009 cost of a comparable Dell model. Legend overtook Compaq Computer and IBM in 1997 as the largest PC maker in China. China is one of the world's fastest growing markets for personal computers and sales to expand about 30 percent there this year, according to research group IDC. Dell has about a 3 percent market share there, compared with its 25 percent of the US market. Dell's challenge will be beating Legend's low prices, retail channels and service support, said Kitty Fok, an IDC analyst. "The consumer market in China is growing the fastest," Fok said. "But in the past, none of the multinationals (have) been able to take off in this market." From Computer News, Page 3, Wednesday, May 30, 2001 info@AsiaPort.Com

To: GVTucker who wrote (165663)	6/1/2001 10:48:41 AM
From: stubba	Respond to of 176387

GVTucker - not exactly the 1.25 million option grant to MSD was for non-qualified options that had strike price set at fair mkt value on date of grant. 900k were at $43.44 and 325k were at $37.59. these options expire in ten years and vest 20% per year for five years. the discounted stock options for 145,555 were received in lieu of cash bonus. strike price for these options was 20% discount to mkt value on date of grant. the 20% discount is equal to value of bonus. these options also have ten years until expiration but vest much more quickly (don't recall if they fully vest in 6 months or 1 year.) the huge valuation on MSD option compensation is result of black-scholes valuation method