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

To: Jim Patterson who wrote (35041)	3/20/1998 1:57:00 PM
From: Fangorn	Read Replies (2) \| Respond to of 176387

Jim, If Dell passes the full price cut through of course ASP will go down but because the profit per machine will stay the same profit margin will go up. If they make $500 on a $2500 machine that is 20% profit. If they make the same $500 on a $2300 machine that is 21.7% profit. How can this possibly be bad even if they sell exactly the same number of machines? By the way that $500 figure was pulled out of the air and is only used as an example.

To: Jim Patterson who wrote (35041)	3/20/1998 2:04:00 PM
From: Venkie	Read Replies (1) \| Respond to of 176387

They have to do something with the 2.5 bil in inventory..Thats got them choked and they cant see the forrest for the trees..They loose more market cap every minute.hell ! They even lost mine..Its a dog and will live in the dog house for a long time trying to swallow the crap they are chewing on. It will find support at 15 if the market corrects....20 if things stay the same. Dell will move up and may hold better than some think in a correction..Then go to new highs.

To: Jim Patterson who wrote (35041)	3/20/1998 3:31:00 PM
From: David Harker	Read Replies (1) \| Respond to of 176387

Dell, ASP, and PII price drop. Jim P. wrote: "If DELL cuts their high end, that is anything with a 333 in it, by $200 / per 333 in the box, Won't that lower their overall ASP ? What this does to CPQ is irevelent. Lets talk about how it impacts DELL's bottom line." If Dell's costs to build a PII 333mhz drop by $200, and they cut price by $200, passing all the Intel price drop on to their customers, they still make the same $ amount per box. ASP does not directly matter! Assume Dell spent $1500 building a PII 333mhz box, including buying parts, paying assemblers, etc, and that they added $150 profit, selling it for $1650. (this is all 'made up' figures). Now assume Intel drops the cpu price by $200. Now Dell's cost is $1300 for same box, so they add $150 profit and sell it for $1450. They are now competing EXCELLENTLY on price, since competition paid the old, higher cpu price (due to huge inventories) PLUS dell still makes the same $150 per box!! ASP is meaningless, the profit margin per machine is what matters!