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

To: Doug Larson who wrote (34400)	3/15/1998 8:16:00 AM
From: qpd	Read Replies (1) \| Respond to of 176387

Overall response is "too many cooks" this new model has very little likelyhood to work profitably. CPQ/IBM/HP have tried a number of things to emulate DELL. Invested in their own BTO capacities, and remember CPQ attempts to buy GTW. In a way by doing this, these companies have accepted they are unable to compete on their own with DELL. Complicating a picture by adding another player and additional steps in the loop to compete with still same efficient DELL model? Consider what happens when a customer is buying a PC. Current picture is: DELL : Components from suppliers -> DELL -> BUILD -> SHIP to Customer 5 day shipment 7 days inventory 50 growth in profits and sales CPQ/IBM/HP: Components from suppliers -> CPQ/IBM/HP -> BUILD ->SHIP to Customer Varied shipment time Components from suppliers -> CPQ/IBM/HP -> BUILD -> Vendors (CHANNEL INVENTORY) HP 60 days CPQ 120 days IBM larger Under the current conditions, DELL's model is the best every one has tried to emulate with varying degree of success. ------------------------------------------------ Ingram intends to build BTO units for FIVE different companies who now build and sell their own brand names, both directly and through additional vendors. New picture: DELL operations will remain the same CPQ/IBM/HP: CPQ/IBM/HP order to INGRAM-> Components from suppliers -> INGRAM -> BUILD -> CPQ/IBM/HP -> SHIP to Customer Varied shipment time that is bound increase due to increase in number of loop steps. CPQ/IBM/HP order to INGRAM-> Components from suppliers -> INGRAM -> BUILD -> CPQ/IBM/HP -> SHIP to VENDORS ->PC sits on the shelf -> Customer shops and buys PC Under the new model, what a customer buys is an INGRAM PC with CPQ/IBM/HP brand names. Consider buying a car built by HUNDAI under the brand name Ford, GM, Toyota etc. Cost is bound increase as there is a new player in the picture and has to make a profit. Who is responsible for TECH and Customer support? What happens to all the investment CPQ/IBM/HP have already made in BTO models. Are they going to write off or sell at discount and loose more bottom line?

To: Doug Larson who wrote (34400)	3/15/1998 11:58:00 AM
From: Jack T. Pearson	Read Replies (1) \| Respond to of 176387

Doug, The Ingram Micro news sounds like smoke and mirrors to me. Ingram Micro is a very big, very successful distributor. They appear to be making a play for more of that market share. But the bottom line is that Compaq and the other retail channel sellers have to significantly cut the time from when they buy components until those components are delivered to their customers in integrated systems, while, at the same time reducing the number of middlemen who take a cut. I don't see how the Ingram Micro option solves these problems for Compaq, IBM, HP, and others. Jack

To: Doug Larson who wrote (34400)	3/15/1998 5:36:00 PM
From: ed	Read Replies (4) \| Respond to of 176387

My comment on this news is DELL will be in very big trouble , because the advantage DELL has on the BTO model is eliminated, and now every company can go to the BTO model.Since the manufacturing sites are all over the world, which means the delivery of products to the customers probably is no more than four days.

To: Doug Larson who wrote (34400)	3/16/1998 11:06:00 AM
From: K. M. Strickler	Read Replies (1) \| Respond to of 176387

DL, I've read your message and the responses so far, so now for my $0.02! For me, it would be kind of a wait and see! I have to believe that trying to build BTO's for every major manufacturer could be tough! If it works out well, DELL could take advantage of the situation if they got 'behind' (small chance), they could order 'DELL' computers from the Micro manufacturer. (It would be an interesting comparison, if they could get them for a lower price than producing them at their own facility!) It does appear that there is another 'layer' of profit to be taken out of the end product, and I don't know where that would be paid without passing the cost to the customer. The only thing that I could see that might hurt DELL was if the 3 'biggies' decided to subsidize the initial market penetration, and sell the systems for less than the cost to produce! (Wouldn't be the first time that this was done!) From the MICRO side, they would have to be able to collect the various components from different manufacturers, including 'motherboards' which support Intel, AMD or Cyrix cpu's, and disk drives from Maxtor, WDC, Seagate, Quantum, etc. This also applies to memories, sound cards, and on and on! It is do-able, but it would be interesting to watch, especially during the 'start-up' phase. remembering that DELL is already there! Have to wait and see! JMHO, Ken