Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: VICTORIA GATE, MD who wrote (46615)	6/7/1998 10:58:00 PM
From: Geoff Nunn	Read Replies (3) \| Respond to of 176388

Dr. Gate, Has there been a mistake? The first article you posted speaks to the hard times in the semiconductor business caused by overproduction of chips. Dell is not in this business, Dell is a pc manufacturer primarily. Its fortunes are not tied to the chip business. In fact it's pretty much the opposite. If chips are being over supplied, prices will fall and Dell will benefit. A reduction in chip prices lowers Dell's cost of production. What it doesn't do is affect the value consumers derive from PCs, so the demand for PCs remains unchanged. This means Dell's profit margin goes up, pc prices remain unchanged, and the difference flows directly to Dell's bottom line. In time, of course, lower costs may induce pc manufacturers to expand production, which would bring down pc prices. Meanwhile though, Dell enjoys the fruits of temporarily elevated margins. The second article you posted deals with the pending antitrust suit against Intel. I can see nothing about this suit that would affect Dell. Unless it can be shown that the suit will lead to lower prices on CPUs, in which case Dell will benefit.

To: VICTORIA GATE, MD who wrote (46615)	6/8/1998 8:54:00 AM
From: Mohan Marette	Read Replies (2) \| Respond to of 176388

Well not so fast Doc. Your assumption and logic seem flawed as one is Orange and the other Apple.'Chip' woes are primarily due to over capacity and Asian melt down.Dell's business in Asia is marginal at best and even growing,if anything Dell and other PC makers should benefit from lower chip prices. So if I were you, I worry about your Intel holdings as your 'worry' about Dell is misplaced and misguided.