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

To: Meathead who wrote (36598)	4/4/1998 1:56:00 PM
From: Jim Patterson	Read Replies (1) \| Respond to of 176387

Meathead, You fail to mention that CPQ and IBM both have product divisions other than PC Box building. CPQ is quickly growing its network business. IBM has Software, Chips, HDD, and services. CPQ will soon have DEC's 24,000 service personel. BTW, CPQ's 8.6% net margins is higher then DELL's 7.6% Part of this is because CPQ started selling network equipment. CPQ can also offer more compex systems then DELL because of it's larger more diverse product line. I understand all of your cash flow cash burn examples. But, there are a lot of other elements involved. The idea is not to put DELL out of business. The goal is to shake consumers confidence in the company. Then the window opens for CPQ and others to expand at the expence of DELL. This is all theoritical. The basic idea is to play on the emotion of people's preception to accomplish your goal. Last On a quick check, CPQ has more like 4.5 times the cash that DELL does. Jim

To: Meathead who wrote (36598)	4/4/1998 3:12:00 PM
From: jim kelley	Read Replies (1) \| Respond to of 176387

Meathead, Excellent analysis! CPQ has enough real problems without digging its own grave in a price war. IBM and HWP are too smart to play that game. The key to success in this market is managing inventories and having the correct product marketing strategies. With DELL at 7 days per inventory turn, HWP , IBM and CPQ have a long way to go to close the gap from the 80 day (minimum) pipe they currently have. Regards, Jim Kelley

To: Meathead who wrote (36598)	4/4/1998 3:59:00 PM
From: Eddie Kim	Read Replies (2) \| Respond to of 176387

Meathead, They don't call it a "PC War" because all the companies get along. It's a war of attrition based on slashing prices that kills off the weaklings. Just look at what happened in the early 1990's when Compaq started that PC War. How many computer companies folded? In addition Compaq must get rid of old inventory at any price before it becomes pratically worthless. As for Compaq, it has roughly $4 billion in cash ($2 billion from DEC...correct me if I'm wrong). 85% of all revenues come from corporate accounts. It has the highest revenue margins in the industry at 27.5% (1997) largely due to its dominance in server sales. So forget about your math, because Compaq makes more money per machine than Dell - even though they're less efficient (which is something Compaq is working on and hopes to solve by summer). As for Dell, there is no doubt in my mind that they are one of the top pc companies and will come out just fine. Yet, to say that Dell's margins won't be hurt is foolish. It might not happen, but I wouldn't bet on it. Dell just released there top Pentium II notebook for less than $4,000. That's a first. -Eddie