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

To: Boplicity who wrote (20964)	11/9/1997 11:10:00 PM
From: Meathead	Read Replies (1) \| Respond to of 176387

Greg - All very valid concerns that all of us struggle to understand... except Michael Dell<ggg> Andy Grove summed up what is taking place in one sentence: "As the market size grows, it will continue to segment as distingishable pieces become large enough to be served with separate solutions. " Beautiful! It's no longer a one size fits all computing environment. The sub 1K PC was designed to fulfill a growing need, to serve a new additave market that will not likely cannibalize more powerful machines. The whole issue is overblown and causing lots of FUD however. The sub 1KPC does something that can't be done by a $2000 PC and that is, provide a low cost solution for basic computing tasks. It will be less than adequate for the more powerful, exciting and productive apps that exist today and will exist tomorrow. I wonder how many 2nd or 3d time buyers (in the home) are going to upgrade their 3-4yr old system with a sub 1KPC (look at the feature set)? More likely, they will upgrade their main system with a midrange offering and the old one will go to the kids, a spare room, or wind up in the want ads. Also, 2nd time buyers are more savvy, for $1000, they can easily assemble a more powerful system thru Computer Shopper, local hardware shops or the paper. In my mind, the only logical market for an entry level PC would be 1st time buyers. This is by definition a "new" market. I think the major fears arise from the perception/misconception that all along consumers and businesses have had to overpay to satisfy their computing needs. Now that a cheaper solution exists, they only have to buy what they need and this will hurt sales of more powerful machines. This is an oversimplification of a complex market. Where are the killer apps? I contend that every app I use at work and at home can greatly benefit from the hardware advancements were seeing today and will see in the next few years. So I'm a power user, there's many more of us than you may think. Also, don't be fooled into using CPU speed as a benchmark for system performance. Compaq's low end machine cheats all over the place architecturaly to come in at $799. You'll be unpleasently surprised when running more than a few graphicly intensive apps. In the business world, these 1KPC's are just not ready for prime time even for the lowest of tasks. Their lack of manageability, connectivity and upgradability make them a waste of money. Look for Dell's new managed PC at ~$1250 to fulfill the low cost corporate computing needs. The real signs of a sea change are not upon us yet. I believe they are at least 5 years out when the limits of optical photolithograpy are realized and if the alternatives (Xrays and such) don't work, but like life, technology always finds a way. Even then, there would be tremendous effecincies to wring out of existing technology. Imagine if you will, processor speed/complexity and memory density advancements stop today, for ever. What would happen? Well, on the hardware front, you would'nt believe how many improvements you'd see over the next 10 years on how this stuff gets hooked up within the system! New standards, archetectures, parallelism, scalability, efficiencies galore that we don't have time to develop today in the race to shrink die and push the resulting systems into the marketplace. And software would continue to march on to take advantage of it. To be sure, anyone who thinks software has plateaued is not using their imagination. Systems will continue to evolve and change and will only vaguely resemble systems of previous generations rendering them obsolete. This much is certain in our lifetimes. This means one thing: Dell will always have lots and lots of systems to develop and sell at a profit. BTW, the future of growth and profitability in PC's is just fine. We investors got bigger short term problems like Desert Storm II, analyists, Asian currency crisis, analyists, a nervous market and analyists among other things. MEATHEAD