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

To: Meathead who wrote (24932)	12/12/1997 1:56:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Meathead, I'm always ready to be educated. Seems to me that I used Ed's numbers. If my analysis is correct, then the canibalization problem could be acute, in which case CPQ's numbers could come in much worse than expected. This could hurt the price of DELL until February when DELL publishes. I think we'll be able to tell if that's the case if we see a large increase in the number of units sold coupled with a substantial decrease in ASP plus erosion of gross margins. If I see that, there is a good chance that CPQ will drag down DELL and I may be able to take advantage of one of those rare inefficiencies in an otherwise efficient market <VBG>. Just a heads-up to the thread. Regards, Paul

To: Meathead who wrote (24932)	12/12/1997 11:58:00 PM
From: ed	Read Replies (1) \| Respond to of 176387

Thank you for your praise on my Kindergarden analysis. My analysis is based on the real cost of components and add upward, and yours is calculated backward based on the assumption of retailer and wholsalers' profit margin, and My calculation is that the cost of sub $1000 pc is less than $500, and your backward calculation with 4% profit , the cost came to be $650 to $700. The problem for your calculation is that you already assume that CPQ's profit margin is 4% and CPQ's cost can not lower than $570 with 14% profit. My question is how do you know CPQ's cost can not be lower than $570 ? By your guess ? Kindergarden Guess ? Pls give me an answer why you think CPQ's cost can't be lower than $570 ? The cost of BIOS is less than $10 with EPROM being counted !!!!!!!!!!!!