Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Koen Ameloot who wrote (38038)	4/15/1998 10:11:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

DELL vows to expose price gouging by rivals. Koen: Thank you for posting the link.No,I don't think this has been posted before. I think it is must read for anybody who is remotely interested in DELL,be they Longs or Shorts or whatever. Here are some excerpts from the article,one can also listen to the audio version of the interview at this site. ------------------------------------------------------------------- Michael Dell vows to end server 'rip-offs' By John Dodge, PC Week, and Charles Cooper, ZDNN April 15, 1998 5:59 PM PDT ...................... The 33-year-old chairman and CEO of Dell Computer Corp. (DELL) said Wednesday that his next initiative is to "expose the great crime" surrounding the overpricing of PC-based servers while also noting that PC demand remains strong. Compaq's earnings don't impress, and there's no quick fix in sight. "Our production lines are rolling," he said, adding that Dell's move to the Pentium II was as fast as its transition from 486-based systems to the Pentium. At the same time, Dell fired a broadside at his chief rivals, saying that computer companies are ripping off corporate customers by overcharging consumers for servers built using 'industry-standard technology.' .................... But in a wide-ranging interview, Dell vowed to "change the rules of the server game" in the weeks and months ahead. ........... Dell on the attack With Compaq (CPQ) -- the Austin, Texas company's main rival 100 miles to the south -- reeling from bloated inventories and a nearly profitless first quarter, Dell stepped up his attacks on what he claimed are less efficient PC makers. "Our pricing [on servers] is based on our cost," he said, saying that his rivals make 60 percent of their profit on servers although the products represent 20 percent of overall sales. ................. "We will redefine the value equation once again. The industry average inventory [for channel-based PC makers] is 80 to 100 days. Ours is 10 to 15 times lower than that. Inventory devalues 1 percent a week," he said. ................................. No Data General purchase Dell also disputed reports that the company was considering buying Data General to fill high-end gaps in its server line. He added that the company planned to internally fund growth rather than through acquisition. "We have more opportunities than we can pursue," he said. .................................. Although he expressed confidence that users would buy new PCs based on the next fastest processor, Dell remained cool to the introduction of Intel's Celeron chip, a product dunned by critics as under-powered. However, Dell nonetheless said the company would likely incorporate Celerons into the low end of its Optiplex line. Not close to retirement For Dell, who has been in the PC business since 1984, retirement is not in the near or mid-term future. Since Intel chairman Andy Grove is slowing down, why shouldn't he, Dell was asked. "He is old enough to be my father,'' said Dell. "I have the greatest job in the world." Clearly, these are boom times for the young CEO. The company expects its yearly annual unit shipments to climb more than 15 percent through the remainder of this decade. Dell discusses Compaq's Achilles heel. Indeed, Dell's revenues increased 59 percent during its last fiscal year. In contrast, Compaq earlier Wednesday announced that earnings free-fell 96 percent in the first quarter to $16 million. The cross-Texas rival, which has had to cut prices to clear out an inventory backlog, warned that its next quarter would not be much better. Surveying the terrain, Dell said he thought Compaq's inventory woes left the company more vulnerable than it has been in a long time. Well-positioned Andy Neff, senior managing director at Bear Stearns in New York, said that Dell is in an excellent position to exploit still "healthy" customer demand. "A lot of people look at Dell as being a PC company, but it is also a unique delivery system which allows it to get superior financial results," Neff said. "It is really focused on optimizing its business."