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

To: JRI who wrote (57851)	8/12/1998 1:24:00 PM
From: MichaelW	Respond to of 176387

Re: Chinese devaluation I doubt it'll happen, but it creates a sense of fear out there. MW

To: JRI who wrote (57851)	8/12/1998 5:35:00 PM
From: Geoff Nunn	Read Replies (1) \| Respond to of 176387

John, I think you sum up HP's situation pretty well. HP clearly is no longer the company it once was. I begin to have doubts about HP a few years ago after it decided to enter the PC business. The decision seemed to make little sense on economic grounds. Existing boxmakers with a few exceptions were struggling, and some respected firms only recently had thrown in the towel and were exiting the business (ATT, DEC). HP really had nothing new to offer. As Rudedog has said its product line is unexceptional. The same can be said for its business model. Its decision seemed to be a major blunder motivated by nothing more than a desire for empire. PC manufacturing doesn't play to HP's historic strengths. In boxmaking the name of the game is relentless manufacturing efficiency and cost cutting. HP has never been good playing that game. Its strengths are engineering and product innovation. HP is headquartered in high cost Silicon Valley. It has a somewhat free-spending corporate culture to match. Let's face it, it didn't acquire its historic reputation for being "good" to its employees through accident. Nothing wrong with that, but if you're going up against rival firms with cost cutting on the brain (i.e. Dell) you must choose your battles carefully. HP's decision in retrospect looks about as judicious as Pickett's ill-conceived charge up the hill at Gettysburg. Although this may be an over simplification, I think the fundamental problem at HP is the passing of David Packard. For many years after he retired from active management, Packard dominated the company. He was truely one of the great business leaders of our time. I agree with you Platt is a major disappointment, but one problem may be the prodigious size of shoes he was elected to fill. Concerning China I have no opinion on whether a devaluation is likely. To address that issue, the first thing I would want to know is whether the currency is overvalued or not in fundamental terms, which means purchasing power parity (ppp). I haven't seen any data that would shed light on this question of the ppp exchange rate. Geoff