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

To: kemble s. matter who wrote (38927)	4/25/1998 7:11:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

Dell & Gateway an interesting combination? Hi Kemble and everyone, Here is an excerpt from Computer Intelligence article by Aaron Goldberg,interesting article.Nothing wrong with little speculation but it may never happen as Mr.Goldberg says. --------------------------------------------------------------------- [Source: Computer Intelligence-For private use only.] --------------------------------------------------------------------- Dell and Gateway? Combining the Two Best Customer Sets What would happen if Dell and Gateway Got Together? Although I wish I had some inside information, on a proposed merger of this scale, I don't. Rather, what I do have is the ability to analyze customer segments and customer types using the Computer Intelligence Technology Data Base. What this unique fount of information shows me is that, together, Dell and Gateway are actually a better fit than you might think. If you look at the customers of these firms, it presents an interesting picture. Both firms have some very clear commonalties: Their customers understand the value and need for more advanced technology. Their customers are not "bottom feeders" looking for the lowest possible price. And, they occupy a position of importance amongst customers that are highly knowledgeable. Where they differ is in their areas of strength. Dell is the No. 1 or 2 player among large and medium sized firms, and Gateway is doing well among true consumers and smaller business, but there is some overlap in small business and the self-employed. Combined, Dell and Gateway would be No. 1 in every commercial segment. Not only that, but you can see that they'd have better than 20% share in all segments. However, it is also interesting to see how much affinity the two customer sets have. They are actually quite similar in many regards. To use an analogy, Dell is the fancy restaurant with great food and superlative service and decor. Gateway is the local, more casual restaurant that has great food, good service, but isn't as formal. In fact, if you look at Dell's best customers, those that have more than 50% Dell PCs installed, Gateway is the number two or three vendor. This is also the case in the best Gateway accounts, Dell usually shows up as the No. 2, or worst case, No. 3 vendor. So there is a natural affinity that goes beyond the types of customers that they sell to and beyond the products they sell. However, to work, there has to be strong brands for both companies. In fact, it might well be better termed as a pooling of interests, rather than an actual purchase. My sense is that this is not something either firm is working on though. While the firms are headed by two of the best people in the industry, reality says they'll probably remain separate, independent firms. Still, it would be a great combination.