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

To: B Hewson who wrote (25298)	12/16/1997 12:56:00 AM
From: jim kelley	Respond to of 176387

Barbara, CPQ went to IDC and got them to move CPQ to number two spot in corporate desktop (US) over DELL. They probably used moved some of the low cost PCs into the business market to do that. So CPQ is spending a lot of effort managing its image this quarter. Even so their stock has been hard hit, moving below its 200 day MA ($55/share). This is a crucial quarter for CPQ in that it is the second full quarter since their BTO, and low cost PC inititives. The low cost PC is cannibalizing their desktop sales in the 1 to 2 K range. If you allow a 4% margin for the distribution channel and a 4% margin for the retail store, you can see what DELL's advantage is approximately. 1.04 X 1.04 = 1.082. This is a natural advantage of at least 8.2% . Actually, it is more because the inventory pipe is longer and there are other promotional, administrative and flooring costs which DELL does not have. An earlier posting set the number at 14%. Regards, Jim kelley