Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Don Martini who wrote (56820)	8/6/1998 7:00:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 176387

Don, I can't answer the question directly, but in judging by CPQ's cogs in periods prior to the last few, it seemed that CPQ had a significant advantage. But CPQ also made some components themselves (motherboards, I believe), and so this would be reflected as a lower cogs because the external manufacturer's profits would be eliminated. Now if you look at your technique in getting good prices you will notice that you placed large orders. This is the advantage that Compaq has since orders are placed on a forecasted basis rather than on a JIT BTO basis. TTFN, CTC

To: Don Martini who wrote (56820)	8/6/1998 11:40:00 PM
From: rudedog	Respond to of 176387

Don - I did a little research on this and came up with the following list - CPUs Operating systems Disk drives Memory support chipsets For example, one might think that Intel would want to take care of Dell, who is one of their staunchest supporters and clearly a number 1 favorite of the Intel exec team. But wait a minute - CPQ buys about twice as many CPUs as Dell, and furthermore (as Chuz pointed out) gives a firm order with fixed delivery dates - ASSUMING THEY GET THE RIGHT PRICE. If they don't, they buy K6 processors for AMD, at least in the volume products. Intel is in business to make a profit. They will do what it takes to maintain business with their largest customer (CPQ).