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

To: Paul Merriwether who wrote (45393)	5/30/1998
From: Meathead	Respond to of 176387

Paul I thought you were an Intel follower. You are aware of their strategy arent you? Where Intel goes, Dell goes. In case you have'nt noticed, Dell has had configurations available for under 1k since Q3 of 1997 but corps arent buying. What's changing? Intel's strategy and cost structure. It's now much easier to have a low cost offering for Dell now that Intel has paved the way. Celeron (soon to be Mendecino) is a Slot 1 device. Dell's value platform at the low end is the Optiplex G. Pull out the PentiumII processor and replace with Celeron and what do you get? Incremental business without cannibalization using an identical platform with a cheaper processor. Profit margins remain intact. Regardless what the media says, there is never going to be a majority of business concentrated at the low end. Having an offering in this space without additional design effort vs. making a focal point for growth are two different things. - Incremental business means increasing volume. - Lower prices pull down ASP - Intel's pricing allows cost structures and Gross margins to remain healthy. I have been projecting declining ASP's for Dell for quite some time. My current model has ASP's at ~$2350 by Q4 of FY00 which will be the healthiest in the industry at that time. However, OPEX is declining, volume is exploding, COGS continues to decline and gross margins are going to remain healthy as a result. Projected EPS with this ASP decline is $3.19 for FY00. Continued growth rates in excess of 50% top to bottom. M. Dell listens to his customers. Dell's marketing efforts are second to none. They will move into the right markets when the timing is right. Do you think that's being arrogant? MEATHEAD