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

To: Jim Patterson who wrote (36776)	4/6/1998 5:44:00 PM
From: Meathead	Read Replies (2) \| Respond to of 176387

Jim, you need to study corporate purchasing needs, habits and trends. The initial cost of the hardware is almost irrelevant. The super cheap boxes are not TCO worthy for smart buyers not to mention that manageability, reliability and longevity is sub-par. Not what you want to run your business apps with but ok for the home user. This issue has been beat to death. ASP's continue to decline at a relatively steady rate as they have been for years. The trend is understood and planned for by companies like Dell who continually shift product mix to higher profit, higher growth segments. Where was the market for WinTel workstations 18 months ago??? Do you think these high opportunity segments are drying up?? ASP's under pressure for MATURE technology in all segments (an area Dell avoids) is a constant in this industry. It NEVER stabilizes. Just how long have you been following this perpetual trend which now seems new to you? I design PC's for a living. There is no free lunch and you get what you pay for, period. You non-technical guys try and distill everything down to processor speed when it reality, it means very little in terms of overall system capability and performance. Don't invest your money based on the fact that system A has a faster processor and cost less than system B so therefore it will take the industry by storm. I could rattle off a thousand things that purchasing managers at corporations look for when buying a business class PC that you or any average consumer have no concept of what it is or why it's needed. After all, all that matters is CPU speed, memory and hard drive size... right? So you think it's only a matter of time before companies wise up and buy these less costly machines? Why now? Why haven't they been buying them over the years to satisfy most of their needs? The idea of a cheap PC is not new, they've always been with us... only the price is relative. The only way to design a cheap PC today, just like yesterday, is to de-feature it. Features are time relative as well. The needs of the market don't suddenly change just because there is a new low cost offering. For instance, as a power user at work, my previous machine cost ~$2900. It had 1 166Mhz Pentium, 2G SCSI hard drive and 48M of memory. According to you, my company should wise up and upgrade the system with a $1000 system that has a 200Mhz pentium, 4G hard drive and 64M of memory, or maybe spend $1500 and get a 266 P2 with more stuff... right? Wrong. My system needs to be DMI 2.0 and Energy Star compliant. It needs a 300w power supply and a PCI to PCI bridge to support all of my add in cards. It also needs integrated SCSI... dual channel for redundancy and a 100BaseT NIC (not a modem). Newest versions of my simulation and CAD software dictate faster video performance (who says where are the killer apps? These apps are killing my machines). This means I need AGP 2X w/ 8meg of frame buffer memory blah, blah, blah. I could bore you with thermal considerations too...... You see, I can't replace my system with one that is just faster and cheaper, it needs to be compatible with my needs. To get the same level of functionality will still cost around $3000 because you don't find all the needed extras in those cheap systems target for consumers. In a few weeks, Intel will begin shipping 100Mhz BX. This is leading edge technology which will sell for a very large premium. If you think there won't be much of a market for it due to cheap PC's, think again. There will be a slew of announcements for Servers, Workstations and Desktops that utilize 100Mhz SDRAM, BX, dual slot1 configurations and the industry is gonna sell a ton of em. There is tremendous pent up buying pressure becuase many purchases have been put off waiting for the BX. How many old systems does CPQ have stuffed in the channel??? The fire sale for that old stuff will accelerate to make room for these 100Mhz BX platforms. I can design a ~$400 PC today. $60 for the motherboard. Use Centaur's WinChip CPU and 32M of memory for an additional $100. Chassis, 100w power supply, 1G HD for $100. Monitor/key/mse for $150. The NSM PC on a chip would allow me to save $15 - $20 off the price of the motherboard. Whoopee-doo. What business is gonna want this system in quantity? Sounds like a third world penetration platform. Your lack of knowledge stems from the fact that you are a casual PC user and therefore can't begin to understand the complexities and diverseness of this industry's technological needs. You over simplify, over generalize and miss the big picture. In short time, businesses with see these cheep machines for what they are, A great deal. yeah right... in who's fantasy world? Yours? MEATHEAD