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

To: Jack T. Pearson who wrote (46492)	6/5/1998 11:46:00 PM
From: Techie	Read Replies (2) \| Respond to of 176387

GTW's move is brilliant and will be copied by the others as soon as they have the support systems to duplicate it. Why is it brilliant you ask: Ted W. recognized the fact that ASPs were destined to decline going forward. (As some already have noticed this has started happening and is the main source of Intel's problems, and even Dell had a 5% sequential decline this Q.) No, it's not because of the channel stuffing. I agree with you, people would rather buy from Dell than buy CPQ's old technology stuck in the channel. The reason is very different. We are at the END OF A TREND. For decades we had managed to maintain the ASPs by offering higher end machines. So if you spent $2500 this year vs last, you would get more technology that YOU WANTED/needed. So what has changed? Very few of us need a 15Gig drive, or a 400+MHz CPU or 21 inch monitor or better speakers or xyz. The only thing many of us would want in the future is a flat panel display. Given THIS reality (and believe me Mikey knows this better than anyone) Dell would be in trouble even if they had 100% of the market (they only have 7.5%). Ted W. realized this and decided to take a different approach. (I'm sure I don't need to spell the details of the new offerings from Gateway). He is trying to build a relationship with consumers and make it easy for them to buy, upgrade, get on the net etc. etc.... He will be their ISP, know their buying habits, be their start page and offer features to keep them around a la Yahoo one day... this will WORK. (I recently upgraded my old PC with a new one from the office but didn't need new monitor, speakers, printer etc. All I wanted was a faster CPU & modem. I even used the memory from my old PC.) This is the way of the future. WE DON'T NEED TO SPEND $2500K to get more power. This means lower margins etc... Gateway is on it's way to become a net Portal. I think the move is brilliant. Dell is great/the best at what it does/did. The game is now different and they don't need the competition to make their life miserable, their own business realities will do the job for them. Either they move into the very high end enterprise solutions (mainframe territory) or adopt a model like Gateway's or their margins would evaporate over time. If you don't believe any of this, you are like the Iomega folks who learned the hard way.