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Technology Stocks : PC Sector Round Table -- Ignore unavailable to you. Want to Upgrade?

To: Yogi - Paul who wrote (350)	5/16/1998 12:42:00 PM
From: Pierre-X	Read Replies (1) \| Respond to of 2025

Re: Latest cool PC news! Intel's Xeon to tip price scales news.com The Pentium II with 2MB cache (Xeon) will be priced at $4489! Expected to come in the Slot 2 package. "In the face of unprecedented price erosion, Dell has seen its average selling price [for computers] rise. A big part of it can be attributed to workstations and servers," he said. "Intel has so far not been able to exploit this. Xeon is an effort by Intel to cash in on [this marketing strategy]," [Drew Peck] added. No guarantees as to whether this will actually bolster Intel's margins ... but it is a smart attempt to harness the relative inelasticity of demand at the high end. Milton Friedman's basic theories of component supply elasticities assert less price sensitivity for components that are smaller proportions of total product cost. --- On the subject of Dell: Will Dell be next victim of price wars? -- Michael Kanellos news.com ...analysts say it is only a matter of time until the Austin, Texas-based manufacturer has to cut its prices to remain competitive. Mark, that little discussion we had about the Dell 400 Mhz machine and how cheap it was would seem to indicate that Dell is already price competitive in the market. The average selling price of a Dell business PC is close to $500 more than the average price of an HP business PC... The question is, as more and more PC buyers drop their price sights to lower levels, will Dell be able to continue evading that market segment? Dell's entire inventory cycle lasts eight to nine days, Robbins said, a much shorter period than traditional PC makers. I find it interesting that Dell is so often lauded for their extremely thin inventories. No one ever points out that, during the occasional component shortage (it DOES happen <g>) these thin buffers will turn around and bite them in the ***. Of course, it's quite possible that Dell is so smart that they monitor component supply levels and will increase their inventory buffers if a crunch is sighted ... God bless, PX