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

To: Techie who wrote (46541)	6/6/1998 5:26:00 PM
From: Lee	Read Replies (1) \| Respond to of 176387

Techie,..Re:<< So, if they can't sell you a higher end machine, how do they maintain their ASPs?>> Are you preoccupied with consumer issues here? (Dell's share of the consumer PC market is approximately 10%) Did you not think that new apps would not need new PC configurations? Are you limiting your vision of the future and of Dell's market focus? Aren't eroding ASPs a hallmark of many tech industries? How have innovative companies dealt with this in the past? Just some questions we've all pondered. Lee

To: Techie who wrote (46541)	6/6/1998 6:27:00 PM
From: Jack T. Pearson	Read Replies (1) \| Respond to of 176387

Techie, Declines in sales prices are nothing new. I can remember when a 5MB hard drive cost $3500 (1982). I think the ASPs have been falling at about 50% every 18 months for several years. This didn't just start recently. The key is the applications. Microsoft office hasn't increased my need for CPU speed, RAM or HD space recently, but the Internet sure has. So I upgraded my hardware (which I bought 18 months ago). Went from 28K modem to a cable modem. Got bigger monitor, faster graphics card, more memory. Future applications driving users to upgrade will include voice recognition and streaming video. My company is facing the same sorts of problems. We now access much more data over the internet. Much of it is highly graphical. The machines we bought two or more years ago are inadequate. We are on a three year refresh cycle. Dell's ASPs aren't eroding as fast as their competitors. That's because their prices for the higher end product are better so they can grow that part of their sales faster than their competitors can. I have heard that since Dell went to all Pentium IIs on their desktop PCs, their ASP has increased. How will Dell deal with eroding ASPs in the future? I think part of it will be by the rapid expansion of their server and workstation market. Part of it will be by offering new capabilities like xDSL and DVD. Part of it will be by promoting larger monitors, more RAM, larger HD, better sound systems. During the last two weeks, Dell executive stated that the public concern about ASPs was overblown. I believe him. Dell has a good reputation for honesty. Jack