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: Markus who wrote (20987)	11/10/1997 8:38:00 AM
From: Sig	Read Replies (1) \| Respond to of 176387

Markus: <<< The biggest obstacle is shipping cost. There is no way that a customer wants to pay a $50 to $100 shipping cost for a %$700-$1000 computer system, where the shipping cost will represent almost a 10% of the computer>>>> I think you have an excellent point on the shipping costs which seems to avoided on discussions here and for very good reasons. I was not serious in implying that CPQ would go out of business but they would have to work harder. Dell reminds me a bit of H. Ford, in that he does what is required to solve a problem. Ford bought the iron mines, the railroad hauling the ore to the coast went on strike so he bought the railroad, the ore carrior ships went on strike, he bought the shipping line, the steel mills went on strike, he bought the steel mills. UPS goes on strike and Dell writes a contract with Fed Ex?? for priority shipment. (might have been able to buy Fed Ex but that is not in the game plan) Perhaps Mikies middle initial should have been A. for Agility. If shipping costs get out of hand I expect to see a solution Sig

To: Markus who wrote (20987)	11/10/1997 10:19:00 PM
From: Geoff Nunn	Read Replies (3) \| Respond to of 176387

Marcus, Dell will undoubtedly enter the sub $1000 market, IMHO, contrary to the view you expressed about shipping costs: There is no way that a customer wants to pay a $50 to $100 shipping cost for a %$700-$1000 computer system, where the shipping cost will represent almost a 10% of the computer I submit that what matters to consumers is not shipping cost, schmipping cost, or any other identifiable cost of manufacturing a good or getting it to market. The only thing that matters is total cost . Do consumers care, for example, that most of what they pay for a loaf of bread goes for shipping and packaging? It has been reported that only about $.04 of the price goes to the wheat farmer. I see no good reason why Dell will not eventually enter the sub $1000 market. Right now they have bigger fish to fry. Remember that the industry is becoming concentrated because of economies of scale (in both manufacturing and marketing). As long as Dell sticks to its made-to-order model it figures to be as competitive as anyone in the low end. It will benefit like few others because of its natural economies and efficiencies. High cost manufacturers such as IBM and HP may enter this market for a time but will be unable to survive, IMO. If Dell ignores this market it will be be leaving money on the table. Somehow I can't see them doing that. Good luck to you. Geoff