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

To: Chuzzlewit who wrote (46002)	6/2/1998 3:05:00 PM
From: JRI	Read Replies (1) \| Respond to of 176387

Wow. Dell has really tanked since this morning...I guess the analysts at the Paine Webber Conference (who listed to Meredith) didn't like what they heard.....all yelled into their cell phones "SELL DELL".. Just kidding, of course. BTW- Thought your last post to JP was great (as usual)

To: Chuzzlewit who wrote (46002)	6/2/1998 3:54:00 PM
From: Jim Patterson	Read Replies (2) \| Respond to of 176387

re: What got Compaq was trying to emulate Dell without jettisoning their channel model of distribution. You can't have it both ways. You are trying to think to hard on this one. Just look at the broad picture. CPQ built too many machines. CPQ over estimated demand. CPQ stuffed the channel and expected it to move. That did not happen and here we are. PC's are comodities and price elastic. CPQ cut prices and is now moving inventory. That is it. DELL is just really good at making the comodity boxes. You have to remember, it is not a contest between CPQ and DELL as far as DELL's stock is concerned. if DELL showed signs of any weakness, the stock is toast. I think the Q1 miss was the first sign that a big disapointment is coming. Jim

To: Chuzzlewit who wrote (46002)	6/3/1998 1:05:00 PM
From: rudedog	Read Replies (1) \| Respond to of 176387

Chuz - I think that you are exactly right about CPQ's attempt to emulate the Dell distribution model, and they are now shifting to a different path after a year of mostly wasted effort. But we need to separate that from the changes to CPQ's manufacturing model, which was not an attempt to emulate anything but to consolidate their strengths. I think you hit on it when you said Compaq, by comparison, relies on large purchases to get best per unit pricing (better than Dell's), but leaves them vulnerable if their forecasting is wrong because prices have dropped so rapidly in the interim. CPQ is nearly complete on a global transition of manufacturing, inventory and cash management systems into a single integrated system. This has already started to show large benefits in reducing the supply chain risk while still maintaining the large purchase volume CPQ uses to get that 6 to 9 point advantage that they later throw away in the channel. The key to this will be a reduced dependence on accurate long term forecasts and a much smaller granularity in the size of production runs for given products, and a reduction in the amount of WIP and unshipped inventory as a result. This is a very different proposition than Dell's model but it still should provide an efficient production scheme which all by itself will move dollars to the bottom line. If CPQ can then get the distribution side fixed they will have a pretty compelling leadership business case. Of course that last one is much harder to address as we have seen.