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

To: Meathead who wrote (45765)	6/1/1998 3:11:00 PM
From: David Tesorero	Read Replies (3) \| Respond to of 176387

Meathead, I'm back in DELL but am worried about the post RE: M. Dell intending to sell 1.2 M shares. Has he been selling much over the last few years or months???? Dave

To: Meathead who wrote (45765)	6/1/1998 9:37:00 PM
From: Bilow	Read Replies (2) \| Respond to of 176387

Hi Meathead; Funny you should note that the total prices of the constituent parts of a computer cost more than a computer. Fact is, this is true for everything. If you price out the individual parts to a car you will find the same thing. This means that the actual costs for the parts I quoted is lower than what I showed, so my point is actually stronger: The older parts of a computer are cheap, regardless of whether they involve "metal and motors" or not. My point is not to suggest that building a low-end PC from parts is a good idea. I wouldn't do that, and in fact, posted a note to the effect that I bought a new computer for a friend for $500 (w/o monitor) a few weeks ago. Building your own computer is sometimes cost effective, particularly if you have special needs different from the general public. In the future, I expect to see less and less of this happening as the vertical markets take over. Nobody assembles their TV from parts, for instance, or their car either. As far as assembling computers from parts, 2 years ago I bought the guts (i.e. motherboard, case, windows95, etc.) for a 200MHz Pentium at the Fry's near Los Gatos in 45 minutes, and had it running in a couple hours. (I am not particularly fast, but that was the second I had assembled that week in the same configuration.) When the company went bankrupt, I bought one of those two Pentium 200s and gave it to my brother. Runs great. As far as your statement "Metal and motors" is just a surrogate term for the mass amount of physical stuff in a PC that can't be produced much cheaper brand new. , these are classic "mumble words" invariably uttered by those who are shown to be wrong in public, but aren't capable of admitting it. I suppose you call a mother board "metal and motors"? Admit that Linley Gwenapp VP is an idiot, and you believed him. Here is your original post: The total semiconductor content of these systems costs about $100, so even if Moore's Law drives this down to zero, we're still a hundred dollars short. The rest of the system is motors and metal that aren't likely to get much cheaper in the near future. exchange2000.com But the parts of the computer that you admit in your post to being more expensive are mostly those parts that have high semiconductor content. Anybody who has ever assembled a high-end computer from components knows this. But this is all a diversion from what underlies our true disagreement. The real question is what will tomorrow's consumer want in a PC. You think he will continue to want mid to high end machines. I believe he will be satisfied with cheap low end machines. The recent drops in ASPs suggest I am right. If ASPs go back up, I will admit I was wrong. But I don't see that happening yet. Instead I see prices continuing to drop. What people are looking for in a PC is in some ways similar to what they are looking for in a car. Power, efficiency, performance, low cost, low maintenance. There was a time when all cars were expensive. When customers selected parts to get a car just like what they wanted. When there were 100s of car manufacturers, the vast majority of which were not vertically integrated, but instead bought engines, for instance, from other makes. Those times disappeared when industry managed to make a car with which customers were satisfied at a low price. The market then became a commodity, with relatively small sales at the luxury end. The makers that were not vertically integrated went bankrupt. A few luxury makes survived, but not for terribly long. I think the personal computer industry is beginning to make this same transition. I'm going to give another post after this one that will show more clearly how cheap computers can go, depending on what it is that the customer needs. -- Carl