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

To: AlanH who wrote (59314)	8/18/1998 10:24:00 PM
From: Tweaker	Read Replies (1) \| Respond to of 176387

Yes, Dell would feel it first if they were not nimble. Surely their suppliers would warn one of their biggest customers of an upcoming price increase and Dell could load up with enough parts to hold them until things leveled out.

To: AlanH who wrote (59314)	8/18/1998 10:51:00 PM
From: Jorge	Read Replies (1) \| Respond to of 176387

AlanH....I'm no expert, but it seems to me that if component prices begin to increase it wouldn't take long for those price increases to reach other PC makers...In other words, the component price increase would put DELL behind for maybe a month, then other companies are going to be competing on the same component pricing in short order...Margins could be squeezed, but it wouldn't last long. Even in a real slow/flat component increase environment there are other advantages that DELL has that, in my opinion is still going to be hard to beat, component pricing being equal...For example, Quick turnaround from order to delivery. Regards, George

To: AlanH who wrote (59314)	8/19/1998 2:45:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Component cost increases (while unlikely in the near term) would be the pathological case for DELL. Wouldn't BTO cause DELL to feel increases first? Yes, because Dell is essentially a LIFO company (i.e. there are no inventory buffers). On the other hand, if the rate of decline flattens then DELL's advantage is (to some extent) diminished. (This does not take into consideration outmoded components, but INTC has helped mitigate that possibility for now.) Again yes for the reasons cited above. But, these points do not take into account the depreciation of inventory. Each faster iteration of the CPU chip reduces the value of slower CPUs. Same story with faster memory. Finally, increasing component costs will be bad for the entire industry (assuming these increases were not triggerd by vast increases in demand). They will force up prices of computers, reduce demand and squeeze margins. TTFN, CTC