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

To: Thomas Duttera who wrote (26029)	12/22/1997 10:38:00 AM
From: Meathead	Read Replies (2) \| Respond to of 176387

Thomas - nothing is that convienitnt. Took some research. I've been trying to get a handle on the internal differences between these two companies. I defined OPEX as: OPEX = SGA + R&D The percentage numbers I posted are: OPEX divided by REVENUE What became clear during that little excercise is that Compaq has a ~5% Gross Margin advantage. Dell has a ~5% OPEX advantage. This gives them both a similar Net margin. Dell's SGA percentage has been trending nicely down while R&D remain relatively flat to slightly up. Expect this trend to continue due to increasing internet sales and support. Always the big question from quarter to quarter is Gross Margins. We can only guess. I am going to do more research to better understand why Compaq's Gross margins are so much better. Compaq bulls have stated many times that Compaq gets better deals on components because they deal in higher volumes. I believe this point is offset by Dell's advantage in inventory turns. My sense is that Compaq's product mix towards the high end server business has been better than Dell's and largely responsible for the GM advantage. MEATHEAD