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

To: jim kelley who wrote (56705)	8/6/1998 10:42:00 PM
From: rudedog	Respond to of 176387

Jim - I got my costs from the vendors, and confirmed them with enough folks at CPQ and Dell to be comfortable that they were pretty close. It's not really that hard to do. You have asserted that the CPQ sub-1K machines are third party, and I responded that they are made right here in Houston, among other places. You can go to any of the watering holes around Louetta and SH249 at shift change and talk to thousands of people who do this work. I am willing to accept the assumption that there may be some small number of machines that are third party manufactured for CPQ but that is not likely to be their mainstream products - according to one of the engineers in the consumer group, they will sometimes do that for a pilot run because it is too expensive to tool the line up for a few thousand units, but once the bugs are worked out they make them inside. CPQ is most of all a manufacturing operation, why would they farm out the work? Dell could certainly compete in the low end but in consumer products, their build to order model is more expensive. Why would Dell go there? They are too smart for that. In the commercial space, Dell could probably do at least as well in the sub-1K market as CPQ, since corporate customers want custom configuration etc. which offsets the volume production model. I believe that in the next 12 months, there will be increasing corporate purchase of lower end machines, and Dell will be there with a solid product. I also predict that Dell will do well in that space and will make at least as good a margin as on more expensive boxes.

To: jim kelley who wrote (56705)	8/6/1998 11:18:00 PM
From: rudedog	Read Replies (2) \| Respond to of 176387

Jim - From another post, a quote from a Barrons article - In fact, says Winnitzki, "Compaq's lower-priced Presario carries the highest return, according to Compaq." That model, the Presario 2254, costs $799, after a $100 rebate. But inventory costs are next to nothing, because demand is so high the stores can't keep the machines on their shelves. "The rate of inventory turns over the last couple of quarters at Compaq are 100 times for consumer sales," says Winnitzki. Of course, I never believe Barrons, except when they agree with me! <GGG>