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: thames_sider who wrote (174937)	5/27/2005 11:33:47 PM
From: Dan3	Respond to of 176387

Re: So work out how to save money on the build/sale process, instead. Add the deliberate ignoring of markets that may be profitable but which are still too small to justify the effort; and of course the relationships with many large customers. And, no doubt, ruthless supplier management which can only really be done by the market-leading OEM; I suspect Intel now needs Dell almost as much as Dell has always needed Intel. Good post. I agree with your comments on efficiency and picking which battles you want to fight. But I think there's more marketing and less goods involved, and that Intel's special relationship with Dell has been crucial. There have been hints that Intel is getting nervous about its dependency on Dell, though I really don't think that there's much Intel can do about it. If there's a change coming it's that HP seems to have gotten more than a little annoyed at being treated poorly by Intel after having carried a lot of Intel's Itanium water for them. The resulting spat can't help but make Intel even more supportive of Dell, short term. Longer term Dell runs the risk of being seen as a least common denominator company with inferior products, but that could only happen if three things were all to occur. The first is that Intel's line would have to continues to lag a little behind AMD's, which has been the case for some time, and actually looks about 65 to 35 likely to continue to be the case for the next 1 to 2 years (or maybe longer, but past the next generation it's impossible to predict how things will turn out). The second thing that has to happen is that AMD needs to greatly expand its production capacity. AMD is on track to triple its capacity next year, but plenty of things could go wrong with that particular program. The third thing that would have to happen is that HP would have to get very serious about betting its brand on non-Intel parts for business notebook and desktop machines. That would be something of a Hail Mary move, which could only be undertaken if 1 and 2 first came to be and even then it would be a nail biting decision for them to make. But it would give HP a shot at turning Dell into another Apple - a purveyor of well known and not disliked machines that don't quite meet expectations for corporate systems. There are some signs that Intel has decided to take Dell down a notch: Message 21367022 No such cuts appear to have been necessary at Compaq or IBM/Lenova.

To: thames_sider who wrote (174937)	5/29/2005 3:26:46 AM
From: Ali Chen	Respond to of 176387

"but yet very few people can actually run 100m under 10 seconds. It requires not just knowledge, nor only the raw materials, but determination and effort to a rare degree." I thank you all who offered thoughts to help me understand roots of Dell's success. The above quotation about sums it all - Dell company is young, does not carry retirement obligations, has exceptional vision, and rare determination, etc. Allow me to express some concern that such concentration of rare and exceptional talents does not seem to warrant that similar or better combination cannot arise under some other congregation of people. In addition to all these unique and exceptional features of Dell, I'd add ruthless execution and cruel shift of their costs to suppliers, just as Walmart does. In addition, I would submit that the other major lever of Dell's pricing pressure on it's competitors is more banal. Dell is one of top ten companies who excessively use stock options as labor compensation package. Since they do not expense real costs of stock buy-backs and re-issuance, they understate their labor expenses and therefore can undercut competition. In the business with small gross margins it does not take much to be "ahead". I think this is a real key to Dell's success. Sorry to ground down your idealistic explanations in such an ugly materialistic way. Happy investing, - Ali