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

To: Jorge who wrote (54141)	7/26/1998 7:09:00 AM
From: tsyl	Respond to of 176387

no effect. if the Intel chip problem had been serious, other box makers would have mentioned in earnings announcements or press releases. Dells problem right now is valuation and mkt conditions.

To: Jorge who wrote (54141)	7/26/1998 7:14:00 AM
From: rudedog	Respond to of 176387

Hasn't Intel said their chip flaw/correction will affect the box makers? I assume you are talking about the XEON delay and not Merced. Xeon volume ramp was scheduled for late august and now will be late september, a relatively small delay. Xeon is a more important chip for CPQ than Dell since CPQ has much more volume presence in the high end where this chip will be used. Dell will almost certainly be able to get enough to meet their needs given their excellent relationship with Intel, since allocation in the event of a shortage of parts is based partly on overall volume with Intel, where Dell obviously does well, and their needs for Xeon are smaller as a percentage of that volume. I don't think Intel or anyone else thinks Xeon delays will much affect Dell or the other box makers. In the case of Merced, HP will be somewhat affected since they will lose 64 bit leadership to Compaq for a while.

To: Jorge who wrote (54141)	7/26/1998 11:11:00 AM
From: jbn3	Read Replies (1) \| Respond to of 176387

INTC Chip Problem, Jorge, re "DO YOU THINK INTEL'S CHIP PROBLEM/DELAY GOING TO HAVE ANY EFFECT ON DELL'S CURRENT QUARTERLY EARNINGS?" To my knowledge, DELL exclusively uses INTC chips, so that you have legitimate grounds for asking whether INTC chip problems might carry over to DELL. I am guessing that your problem is two-part (defective and delay), so will answer it that way. DEFECTIVE CHIPS. Bear in mind that, 1) DELL builds its PCs to the customers' specifications. 2) DELL has a richly-deserved excellent reputation for quality and service. Building on that, I doubt that DELL would start incorporating chips which were known to be defective unless the customer specifically asked for them--can you see that happening? Far more likely, is that they would not offer them at all, and would recommend against using those chips to prospective customers desiring them. That is the only way DELL could protect its own reputation for quality. DELAYED INTRODUCTION There might possibly be some impact here, but minimal, IMHO. DELL's primary markets are Business, Education, and Government. 1) I deem it unlikely that corporations would delay indefinitely acquisition of new equipment while waiting for the 'next-generation machine', although they might well wait a couple of months. It is more important to be competitive now. The savings in buying top quality high-end machines right now as opposed to waiting for an additional 6-8-12 months might very well pay for the machine in the interim. 2) School starts in the fall. Thus, educational budgeting groups need to be buying now. I can't imagine them telling the local PTA group, school board, or freshman class, "We have decided not to order those computers until the next INTC chip comes out, so in the meanwhile, we want you(r) students to simulate all of your computer-related work." Furthermore, as a rule, they may not need the highest end for their applications. So they buy now, in order to get ready for fall semester. 3) Government should not be affected. The government budgeting process is lovely to behold. In general terms, like this: Bureaus, Commands, and Directorates are provided an annual budget amount, which is divided among their subordinates. The governmental fiscal year expires on 30 September. Any unused monies remaining in the budgets of an organization is supposed to be returned to its higher headquarters. They don't have the option of waiting. Note the underlying caveat in returning monies: "Well, if you didn't need all the money you asked for last year, you probably don't need as much as you're asking for next year, so we'll just cut your budget. We can see that YOU are not a good budget administrator." Billions and billions of $$ get wasted (...er, SPENT) trying to use up "year-end funds". As a budget administrator, would you rather buy a million dollars of new parking lot striping, or get some new hi-tech hardware for your office? Furthermore, I have heard (and believe) that government is the weakest link in the Y2K problem. Using current year budget to upgrade now may help solve that problem. They will get additional monies next year. Therefore, my immediate response is, "Why should it?" The only true potential effect I see is that the delay of new chip introduction will allow the current chip market to exist longer, with corresponding decreases in component and, consequently, average selling prices. Note that this does not equate to lowered margin or profit, as Chuz and Geoff, among others, have so ably pointed out. PS. I don't think that the thread was deliberately rude ignoring your question. With very few exceptions, this thread doesn't work that way. There has been a lot of chaff lately. To get a good answer to a question, I would recommend you read the thread enough to get an understanding of who might offer the best expertise in that area, and address your question specifically to that/those persons. DELLish, 3.