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

To: Diamond Jim who wrote (53239)	7/22/1998 3:29:00 PM
From: Tweaker	Read Replies (1) \| Respond to of 176387

The difference between Intel and Dell is Intel had a stockpile of chips to get rid of. They had to lower ASP to get rid of inventory not because AMD was kicking their butt. Cpq also had an inventory to get rid of so they lowered their ASP (perhaps even taking a loss). Dell has no inventory. They lowered their ASP because they were able to bulid the machine for less money. They lowered ASP to pass the saving on to consumer not because CPQ had a cheaper machine. Do you think Dell's $2400 machine is the same as their $1200 machine.

To: Diamond Jim who wrote (53239)	7/22/1998 5:11:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

James, declining ASPs is one of the truly silly arguments bandied about! The thing that hurt Intel was the fact that AMD and Cyrix had credible offerings at the low end. So when companies like Compaq decided to use those chips instead of Intel demad decreased. Decrease in demand causes prices to fall. Intel was surprised at the strong response that AMD and Cyrix received in the marketplace and had excess inventory. Excess inventory cause prices to fall. Prices also fall for other reasons. Prices fall because of shifts in elasticity of demand and drops in manufacturing costs. Economics teaches most of us (excepting those that insist on focusing on ASPs) that firms are profit maximizers. That can often be the result of dropping prices. That's why marketing firms spend so much money trying to find the proper "price point" of their product. I am really getting sick to death of this point. TTFN, CTC