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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: K. M. Strickler who wrote (17550)	2/17/1998 10:05:00 PM
From: John Biddle	Read Replies (1) \| Respond to of 97611

I don't know what DELL has specifically done, (or GTW for that matter) but for whatever reason, they are steadily 'kicking butt' in the direct sales channel! Dell is an extraordinary company. They have selected a very large niche, corporate desktop PCs, and have focused the whole company on meeting the needs of that niche. Some of their strengths: Very efficient JIT (Just In Time) manufacturing which facilitates very high inventory turns. Direct sales is very efficient, with no dealer channel to take a chunk of the margin. Direct sales also translate very well to internet sales which are very efficient. Dell is up to $3 million / day over the net now I believe. Their focus on large customer's needs include maintaining longer product cycles for corporate lines because big companies willingly sacrifice a little performance for ease of support and lowered Total Cost of Ownership. Stability of internal parts (not changing from day to day) is another strength. Don't get me wrong, I'm a big Compaq fan and have been long CPQ since '95, but Dell is a strong competitor that has earned their success and will not give it up willingly. I think Compaq and Dell can both grow significantly for years. They have different approaches and will win different customers. I think in the long run Compaq's approach will be more lucrative if they are successful because their pie is much larger, but there are more, and stronger, competitors to defeat.