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

To: Chuzzlewit who wrote (37480)	4/10/1998 6:06:00 PM
From: KwanK	Respond to of 176387

"While Dell holds the number four spot on the list (23 percent and 18 percent, respectively) a whopping 59 percent of future Dell purchases will be made by new users -- users who do not currently have Dell servers installed at their organization" below is the complete news about it infoseek.com. I think this should be a factor in DELL future growth especially since these are high margins items Kwan

To: Chuzzlewit who wrote (37480)	4/10/1998 9:18:00 PM
From: LemurHouse	Respond to of 176387

Hi Paul, and thanks for the response. There's plenty of room for reasonable opinion on either side of the issue, obviously. I don't know if people are making money on the low-end PC's or not. Its an immature market and I suppose box makers are pursuing different strategies -- some of them simply buying market share, as you suggest. But I think there are a few trends which will make the cheap PC market hard to ignore. (a) Moore's law and market efficiencies will keep driving PC prices lower. Every day the consumer can buy a more powerful machine for less money than the day before. So really its not an issue of the sub $1,000 market, but of the "low end" market. In a few years prices at the low end of the market will undoubtedly be a few hundred bucks and still have serious capability. Will those machines be good enough to run the then killer aps? I don't know, but I am convinced that we will eventually reach the point where users will choose the less capable machine in favor of saving the money. I think this is especially true for corporate buying, where most user's needs are much more modest than say my kids' gaming programs. Maybe we're not there yet, but eventually the market is going to split into low and high ends with markedly different tech capabilities and pricing structures. And I think that the business market will be migrating away from the high end, towards the middle or even low end. That's Dell territory and they can't afford to give it up. (b) Moreover, they don't need to. If anyone can make money supplying the low end, its Dell, because of their more efficient operation. Its not just the direct sale model, but the fact that they execute it better than anyone else. Once they choose to go after that market, they'll own it. Certainly the margins will be smaller, but you can't just walk away from it. I do agree that their main business will continue to be the high-end of the PC market, and we're certainly being rewarded by their success there. But I'm equally convinced that sooner or later, they will have to step in and compete in the lower end, or risk losing market share. Cheers.