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

To: Chuzzlewit who wrote (46665)	6/8/1998 2:33:00 PM
From: Jack T. Pearson	Read Replies (1) \| Respond to of 176388

Chuzzlewit, ... rapidly increasing demand would create the requirement for additional capital expenditures in the form of plant and equipment. OK. Assume it does. Who is better positioned than Dell to step up to those requirements. Also, does Dell put up the money to build their plants, or do they lease them? Jack

To: Chuzzlewit who wrote (46665)	6/8/1998 4:41:00 PM
From: Geoff Nunn	Read Replies (1) \| Respond to of 176388

Chuz, I share your view that the demand for PCs is probably elastic, especially in the global market. I would view this as a definite positive for Dell. It would mean Dell can build many, rather than few, additional plants, and yet they can be profitable because the additional PCs can be sold in the market with only relatively modest reductions in price. If demand were inelastic, you would have the opposite situation. One thing you said I had difficulty with: ...wouldn't you agree that the down side to falling ASPs will be the capital and systems strains they put on the existing infrastructure? Falling ASP prices don't just happen. They are a consequence of increasing supply of product reaching the market. Capital investment occurs first, supply increases, and then prices fall. I'm sure you would agree new plants will be built iff they are expected to be profitable. If they are unprofitable, existing capital and systems may become strained, but only temporarily. In that case I would expect box makers to raise prices until the strains are relieved. Thanks for the positive feedback. Geoff