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

To: Mohan Marette who wrote (24873)	12/12/1997 12:47:00 AM
From: jim kelley	Respond to of 176387

Mohan, It is hard to tell whether they are selling more CPQ PC's or they just have more inventory. I could go back in a couple of days and recount the boxes. That might give me a better idea. A lot has been said on the margins of the low cost PC. I was reviewing my notes tonight and the analyst at Paine Weber stated that the after tax profit margins on the Low cost CPQ PC's was 4%.This fits in with earlier estimates of ~50$ per unit. The 4% figure would yield 32$ profit and the 999 unit would yield 40$ by this figure. I suspect that the actual profit is zero because there is no allowance for lifecycle service and support costs through CPQ. At the stores thay will sell you a service contract for 49$ or 99 $ but the support is limited to a list of programs. They will also handle your in warranty service. There may be more immediate profit in the service contracts than there is in the PC sale. The salesmen stated that profit margins were very tight on all the manufacturers products, not just CPQs. Most of the analysts have the low cost PC margins really wrong. They are much lower than generally thought. Regards, Jim Kelley