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

To: Mazman who wrote (37433)	4/10/1998 7:16:00 AM
From: Mazman	Respond to of 176387

Story from today's Wall St. Journal: ----------------------------------------------- Dell Computer No Longer Wants To Be Viewed as Price Discounter By EVAN RAMSTAD Staff Reporter of THE WALL STREET JOURNAL Dell Computer Corp., which built a huge business on its reputation as a low-priced computer seller, said it wants to move away from its discount-price image. In a meeting with financial analysts and money managers in New York yesterday, Dell executives said they will expand advertising and take other steps to eliminate what they called Dell's "brand discount" against pricier rivals like Compaq Computer Corp. and International Business Machines Corp. "We have value to offer that is not price-based," said Kevin Collins, vice chairman. Mr. Rollins said the company still will use price to help build its market share, but added that, "it's just that we don't have to be as far below the competition as we did five years ago or 10 years ago and we want to accelerate that trend." Because it builds personal computers after they are ordered and deals directly with customers -- avoiding the cost of finished goods that are declining in value -- Dell traditionally has sold units for 10% to 20% less than its rivals. With competitors trying to emulate some of Dell's production strategies, keeping prices substantially lower is getting harder. However, the rivals' efficiency steps, under way for more than a year, so far haven't hurt Dell's performance. In its fiscal year ended Feb. 1, Dell's sales grew 59% and profit was up 82%. "It shows you how difficult it is to replicate Dell's model," said Richard Schutte, analyst at Goldman, Sachs & Co. Meanwhile, Chairman Michael Dell disputed growing perceptions that advances in PC processing power are outrunning software innovation and causing demand for high-end systems to slow. Mr. Dell said corporate buyers are still pushing hard for high-powered systems to handle complex messaging and resource-planning software. By the end of the month, he said Dell will be selling only systems based on Intel Corp.'s Pentium II processors. In the face of warnings of slow growth by Intel and some of Dell's rival PC makers, Charles Wolf, analyst at Credit Suisse First Boston, said, "That's a very contrarian view." Company executives also told analysts they expect the Internet to be involved in 50% of Dell sales by the end of 2000, up from around 10% last year. Dell saves money when customers research purchases or order computers from its Web site. While Dell has gained notoriety for the strength of its Internet site, the company defines an "Internet enabled" transaction as one in which some information was gathered on-line, even if the computer wasn't ordered on-line.