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

To: ed who wrote (24959)	12/12/1997 6:36:00 PM
From: Meathead	Read Replies (1) \| Respond to of 176387

AMD makes a fine processor. That's not the quality issue. Your making very broad assumptions about component costs that are very difficult to nail down if you don't know the specifics. Using Compaq's $799 box for example, trying to get a bead on their power supply cost is extremely difficult. How many watts is it? 100w 120w 150w? What are the physical dimensions? Is it a space saver and what costs if any were incurred to make a form factor for their chassis. What about thermal protection? Compaq's case is a custom design with integrated speakers. This is > $50 and you can't find a comparable in Computer shopper. You can buy cheap 100w AT form factor power supplies for $25 all day long. Compaq's may cost them between $30 and $60. That's a wide margin for error compounded by generalizations on the cost of other items. Is it a $12 keyboard or $24 keyboard? There is a big difference in quality and reliability in these items. For Compaq not to eat it big time on service and return charges, they need reasonable quality.. and that can't be designed and built at rock bottom industry prices. And Intels wholsale 166CPU cost to the vendors is $110 to $120 in quantities of 1000 right now. AMD/Cyrix tries to maintain 25% cost advantage. The point is, it's impossible to figure out Compaq's hardware cost based on street prices of basic building block components. This could lead one to believe their margins are 30%. Paul and Jim's method of working backwards is much more accurate. MEATHEAD