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

To: Jim Patterson who wrote (35055)	3/20/1998 3:25:00 PM
From: Jacky AY	Read Replies (2) \| Respond to of 176387

DELL just adds HD, DRAM, Video, or a leather carrying case to maintain ASPs and Margins. Eventually that won't work any more. One point to add. That is, DELL can't set price on their own right. Price is strongly dependent on what their bigger competitors (CPQ, HWP, IBM) want to do. If Compaq wants to sell their inventory at <10% gross margin, there's no way DELL can maintain 20+% margin no matter how well they execute the BTO/JIT model. People thought Intel's price cut of P2-333 this morning was good news. Isn't that a confirming sign for weak demand of the high-end systems DELL solely depends on? Also, with Intel cutting price at such an alarming rate, wouldn't that cause concerns for plunging ASPs? How will DELL grow revenue fast enough to justify its skyrocketing P/E?

To: Jim Patterson who wrote (35055)	3/20/1998 3:30:00 PM
From: Fangorn	Read Replies (3) \| Respond to of 176387

Jim, You changed my assumptions to make your point. If Dell passes the 200 dollars through they will still make 140 profit on the cpu so profit margin on that part goes to 28%. I don't know how DELL will change their pricing but the ball is in their court and they have plenty of room to undercut the competition without hurting margins. If we use your assumption I am going to assume enough additional volume in response to lower price to make up the difference.

To: Jim Patterson who wrote (35055)	3/20/1998 3:37:00 PM
From: SecularBull	Respond to of 176387

Lower cost = higher demand = more unit volume If you're going to own a box maker, the choice is rather clear.

To: Jim Patterson who wrote (35055)	3/20/1998 3:48:00 PM
From: SecularBull	Respond to of 176387

Who said anything about having to continue to charge (just) 20% above cost? Why can't DELL only pass the INTC price reduction onto buyers, and still retain the same dollar profit per processor? The indirect guys are going to realize that their price cuts (commoditizing) are self-defeating. The way for them to preserve market share is to reform their business models, not try to undercut DELL. It's impossible to undercut DELL, PERIOD. This course is only temporary (<6 months), and unsustainable.