Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Jeff Mills who wrote (31721)	3/2/1998 5:49:00 PM
From: SecularBull	Read Replies (1) \| Respond to of 176387

DELL will win any price war. It is for this reason that CPQ would not start one. There isn't a price war going on now, anyway. CPQ is hurt by the bloody war being waged in the sub-$1,000 PC market. You read all of this stuff about the average price of a DELL PC dropping from year-to-year, and almost all of these people claim that DELL must be hurting as a result. The truth of the matter is that DELL's PC's are getting cheaper, not because of DELL having to reduce margins and lower prices to compete, but because the components are getting cheaper, thereby DELL passes its savings on to customers. The really beautiful thing is that the VERY short length of DELL's supply channel and internal inventory allows it to pass the savings on MUCH FASTER than the competition--> further undercutting them! The indirect model is dying a very slow and painful death.

To: Jeff Mills who wrote (31721)	3/2/1998 6:33:00 PM
From: David E. Taylor	Read Replies (1) \| Respond to of 176387

Right on the heels of the report from the ML conference from CPQ about pricing competition came the news wire at 13:11 EST that CPQ was reducing prices on its entire Armada notebook line from between 8% (high end $5000+) to 25% (lo end <$2500). CPQ started down almost immediately from its intraday hi of 33.5 to close at 31, and DELL got caught in the down draft. Obviously the market is hypersensitive to such news, especially when we have high valuations. We may see more declines tomorrow, if so, DELL may take until Friday to recover to the 140+ level. DAvid T.

To: Jeff Mills who wrote (31721)	3/3/1998 12:05:00 AM
From: jbn3	Respond to of 176387

re Price Wars Jeff, since you are relatively new to the thread, you may not have been reading long enough to know that the price pressure is exerted by DELL. Their rapid inventory turn-around allows them the choice of sitting on component cost decreases or passing them immediately to their customers. So, when they do announce, the others have to follow suit to be competitive. (My poor memory vaguely recalls that the pundits have been predicting lower margins for DELL ever since CPQ announced the sub-$1000 last fall.) If you remember, in the article you referenced, CPQ announced that it was experiencing pricing pressure. We have to guess from whom. DELLish, 3.