To: NickSE who wrote (46961 ) 6/9/1998 7:15:00 PM From: Mohan Marette Respond to
Following excertpts noted with interest regarding that rumor stuff.Much obliged cassion for the link to the article as I haven't seen it before. "The rumors have as much accuracy as the International Astronomical Union's computations that put the mile-wide asteroid about as far above our heads as a TV satellite," said Ashok Kumar, in an equity research note Monday. On the contrary, if any PC company is going to displace any other PC company at Boeing, it will be Dell (company profile) displacing Compaq (company profile) for its high-end server and workstation segment, said Kumar. According to Kumar, IBM's contract with McDonnell Douglas runs out in two years. "But Boeing has the option of extracting itself from this contract by buying a predetermined number of units," Kumar said. "We believe that Boeing is exercising this option." Dell, as Boeing's preferred vendor for desktops and portables, has a contract guaranteeing that status for three years, according to Kumar. Dell is one year into that contract. "There is a good possibility that they could displace Compaq Computer at Boeing in this high-end segment," Kumar said. Mansky, an associate analyst at Piper Jaffray. "It would not be out of the realm of reasonable thought that Dell could squeeze Compaq out for the winning share," he said. "While IBM might displace Dell in some pockets, IBM's cost structure inhibits them from underbidding Dell consistently," Kumar said. "The general perception is that Dell retains or acquires accounts by pricing aggressively," Kumar said. On the contrary, Dell offers a better value proposition that reflects the advantages of its business model, he said. "What prompted the rumors we do not know," said Boeing spokesman Bob Jorgensen. But he said it may have something to do with the merger of Boeing and McDonnell Douglas last August. "Dell is meeting our challenges and needs, and [has] supplied quality maintenance in a timely fashion that keeps everything working. We have been happy and are happy with them and plan that to be an ongoing [relationship]."
