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

To: Jim Patterson who wrote (57336)	8/10/1998 2:10:00 PM
From: rudedog	Read Replies (1) \| Respond to of 176387

Jim I posted my suspicions on where CPQ would go against Dell last week - They can produce products which have the same specs at a lower price, they can produce products which have greater capability at the same price, they can leverage a combined HW and services contract to offset HW discounts. Dell could play the price game but they probably should hammer on excellence of field execution to develop and maintain customer loyalty, which is high, and take advantage of CPQ disarray in the field due to the DEC merger and channel conflicts, which will take some months to resolve. They can surely command a premium at the moment, the question is how much - that will determine the pricing action needed. If this continues, Might DELL be forced to move up to the higher points on the food chain ? Dell will have an even harder time trying to move up the food chain as a way to preserve price points, as they do not currently have a way to provide the offerings with a reasonable cost basis. It will take them some time to get there if they decide to go that way.

To: Jim Patterson who wrote (57336)	8/10/1998 2:32:00 PM
From: jim kelley	Read Replies (2) \| Respond to of 176387

JP Re: I read hat CPQ is beating DELL on price by as much as 15%, and 10% in general across the board. Sounds like a lot of BS to me. What are your sources (besides your imagination)? CPQ has not made any significant operating profits in two quarters at the same time their cash position is eroding rapidly. DELL's costs are at least 10% less than CPQ on equivalent machines. Your scenario would have CPQ losing 20 to 25% on its average machine. This works out to be an operating loss of 1026 M next quarter and this is w/o the corporate restructuring costs. If what you say were true it is time to short CPQ because it will be in a corporate wide meltdown.