Wanted to get back to you concerning your some of your posts yesterday....
First, I am flabbergasted with you statement about Japan being a "buy" since 1989.....I am curious, has Dell been a buy since 1989? If so, what do Dell and the (overall) Japanese market have in common (since 1989). Not much, I'm afraid....
Also, in one of your posts, you seem to want to advance the logic that IBM, HP, and Compaq could continue to sell personal computer at no profit or a loss, and use this area as a springboard to support other product lines (that other business units could easily support this strategy..)
(1) If so, being responsible companies, you would think HP, CPQ, IBM would make these intentions known to analysts and shareholders first......How long do you think Platt, Gertsner, Pfeiffer would keep their jobs if they tried to float this idea? How do think investors would react knowing that these companies have (the intentional strategy of maintaining) a multi-billion sales/no profit millstone hanging around their necks for years to come? You (honestly) think these companies would undertake such a strategy just so Dell will 'only' grow at 60, 50, or 40% per annum? (Since when do companies intentionally lose money to hurt another company's stock price- when there is no possibility of putting the company out of business, or change their competitors operating model?)
(2) If CPQ, HP, and IBM tried to do this without telling analysts and investors, how long do think Platt, Gertsner, Pfeiffer would keep their jobs? Can you say 'shareholder lawsuit'?
It is clear from these companies statements that they want to get back to profitability as soon as possible, and quit having to dump inventory in the channel....Nonetheless, because of a defective business model, these companies will always struggle with this issue...
Let's face it: CPQ,IBM, and HP can not compete as effectively (by a long shot) in the same space that Dell chooses to play in (right now). Any "suicide strategy" by the big boys would lead to them leaving the PC business, sooner than later, which would be great for Dell......A more realistic view (I think) is that IBM, HP, & CPQ will continue to try to maximize profit out of targeted segments of the PC business, be marginally successful, and will continue to grow the bottom line much slower than Dell. They will continue to try to imitate Dell (but can not be successful, by virtual of their model). This all in the short-term. (next couple of years) In the long-term, I seriously question if all 3 will fully continue in the PC business, given that they will probably be able to acheive better returns on invested capital in another segments of their businesses, or in adjacent business opportunities....The "box business" will not be necessary for these companies to be profitable in other areas, or to maintain and grow overall company profitability and, one day, it simply will not make sense to maintain a (full) business in PC's for ...
A radical view, perhaps, would love to here from both bulls and bears....
JP- sometimes you seem to want to be a contrarian for contrarian's sake. You should love MD; he is the ultimate contrarian!
(1) Dell makes enormous profits, while other box makers talk about no profits
(2) Dell talks about lower component costs, while others blame "channel dumping"
(3) Dell sells direct, most others don't
(4) Dell has a bright future in the PC space, others???
Well, I could list more..........but why not join us (longs), and the Jack Welch of our (at least, my) generation!
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