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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: G.M. Flinn who wrote (50133)	3/8/1998 12:42:00 AM
From: Paul Engel	Read Replies (1) \| Respond to of 186894

G.M. Flinn - Re: "Will or can CPQ go after DELL's high end stronghold with a one-time fire sale? I pose the "can" because I do not think CPQ's cost structure will allow it." Compaq may try the fire sale route -to purge their bloated pipelines - but their dealers have to make a profit and that is where Compaq is hurting big time compared to Dell - no dealers. Also, we have about 5 /12 weeks before Intel unveils a whole new line of Pentium II/Deschutes devices - Slot 1, Slot 2 and Celeron (Slot 1). Dell will be able to offer these new products as direct competition for Compaq's "older" products - and demand a premium because the machines are newer, faster, ;ower power, etc. So Compaq has no real short term advantage over Dell -- except pricing - deep discounts. Compaq needs to structurally change their business. For 12 months the media journalists and analysts have been damning Intel because of their lack of a sub $1000 focus. Well, Intel has made money up till now - and Compaq is about to NOT MAKE MONEY! And Intel, with the Celeron line, to be followed up by Mendocino (Deschutes + on board L2 cache) and Whitney (Chip set with audio and graphics) will survive and Dell will be a major beneficiary. In fact, my guess is that Dell will use the Celeron line to push his entry level prices lower and still maintain comfortable margins. Paul

To: G.M. Flinn who wrote (50133)	3/8/1998 8:06:00 AM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 186894

Should CPQ sell a nearly identical machine to DELL it will either make less money or lose money. I wonder how many of you really know about the internal infrastructure of Dell. They have made little or no investment in infrastructure, really. Their order management system still runs on a 15 year old mainframe. Its almost impossible to find out at any moment in time what the backlog really is. They have tried to modernize but since there are literally hundreds of disparate systems (most of which were developed by some financial guy on a PC who had no support from any type of IT organization) its a really daunting task and their first crack at a SAP implementation failed to a tune of 37MM. Next they are trying to replace the mainframe with Oracle - a noble goal of course, but the mgmt has decided that since they are upgrading (and the implementation will be done next year they THINK there is no need for any Y2K fixes on the mainframe. Does that sound like good strategic planning to you? In the short term you can save money by not investing in infrastructure for sure. Long term your business falls apart. Ironically, they had an IS meltdown a few years ago (1994?) I wonder how long it will be till the next one. I am not disputing the fact that their web page looks nice, and is updated frequently. Michelle