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

To: Jim Patterson who wrote (42074)	5/14/1998 12:58:00 PM
From: jim kelley	Read Replies (1) \| Respond to of 176387

ALL: HWP made no money on its Business PC operations www3.techstocks.com Interesting, HWP captures market share from CPQ but makes no profit. CPQ inventory bloat leads to price cutting that hurts HWP which had no inventory bloat.

To: Jim Patterson who wrote (42074)	5/14/1998 7:09:00 PM
From: K. M. Strickler	Respond to of 176387

Jim, >>> I am going to go out on a limb here and describe what I think constitutes over capacity. In an industry, over capacity exists when Inventories grow despite increases in unit sell rates. When this Excess inventory causes Price declines, In the case of PC's accelerated price declines, It is over capacity. When companies start to utilize promotional give-aways, That is a sign of over capacity. <<< Is that 'over capacity' or using production capacity to manufacture the 'wrong' configuration. >>> When companies find their business unprofitable despite Unit growth, That is a sign of overcapacity. <<< Unprofitable because of Sub-K prices? >>> I see a lot of this in the PC industry. I think of it as too much horsepower available. <<< Correct! Have to 'harness' the power! RE : <<<<<<I don't see DELLs inventory problems, so much as their suppliers problems with inventory. After all, DELL doesn't check it in until it is sold. How is that a problem? >>>>> >>> I have been through this before. DELL's relationships with their suppliers is not known to me. I think a unit growth decline without DELL accumulating invintory of parts would cause severe strain on supplier relations. the financial impact of that strain is currently unknown. <<< I haven't seen any indication that DELLs numbers will be down. MD has said that they will be up. >>> Since DELL fears nothing, I am going to assume that DELL thinks they can strain these relationships without penalty. Considering that DELL represents less than 10% of the market for a supplier, I question how much strain they will be willing to take. <<< No strain since numbers are up. Ken