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

To: The Phoenix who wrote (66462)	9/21/1998 1:45:00 PM
From: mrknowitall	Read Replies (1) \| Respond to of 176387

Gary - Just some thoughts: "- Competitors are aggressively attempting to emulate the DELL model, they are smart - they will succeed." It think there are small competitors who will attempt to emulate Dell, but their ability to reach the critical mass to achieve the economies of scale is in question. As for the "big" competitors, I see them reaching into their own niches instead of trying to take Dell head-on. "- PC market is not growing fast enough to maintain DELL's growth." I think you might be discounting the replacement effect - which means there is a wave that builds behind each generation of machine as the oldest machines have to be replaced. "PC market will decline due to new in-home internet appliances." Here I think you have a point - but that implies Dell will not participate. I don't know if they will, but they are equipped to do things quickly and in volume. "Margins will errode as competitors get the model down and the PC becomes more commodity focused.". I think this is a fundamental part of the Dell model itself - see above re: competitors, and internet appliances. In short, I think they would do well building toasters or power tools. Good thoughts, Gary - nice to get back to discussing investing and technology as opposed to politics and well, you know. Mr. K.

To: The Phoenix who wrote (66462)	9/21/1998 2:55:00 PM
From: JRI	Read Replies (1) \| Respond to of 176387

You wrote: <Competitors are aggressively attempting to emulate the DELL model, they are smart - they will succeed> Maybe your words would have been pause for thought two or three years ago.....Since then, we've seen a lot of bluster, and not a lot of efficacy (from other companies "challenging" Dell)....This has gone on for quite a while now.........Please identify who these "smart" competitors are.....What moves have they made? I am having a hard time finding ANY evidence of ANY competitors who are ANYWHERE near emulating Dell's clear advantage (in its selected sub-segments)...Gary, its a catch-22.....they can't ditch the channel...until they do, they can not compete against Dell.....Even in a piecemeal fashion, wouldnt you think that if these "smart" competitors were successfully implementing these changes that it would have had some (even a minuscule) effect on Dell's bottom line (to date?)...Dell had their best quarter EVER last quarter (and it looks like are doing even better this quarter!)...At some point, the "smart" competitors have to show some hard results for their actions....At each quarter goes by, it becomes clear that Dell's competitors either (1) Don't know how to emulate Dell's model or (2) Can't emulate Dell's model...Either way they lose. You (continue to) vastly underestimate Dell's advantage in its key markets... <PC market is not growing fast enough to maintain DELL's growth> Dell only has 9% market share. 91% is still on the table. Dell can continue to grow at a multiple of the market's growth by taking marketshare by others for quite some time.... <PC market will decline due to new in-home internet appliances> Dell sells the vast majority of its units to corporations.....These corporations are not going to run their ERP software on in-home internet appliances. In the consumer market, Dell sells to mid to upper end consumer that will in all likelihood continue to buy Dell because they use their home computer to run complex computing functions for which in-home internet appliances will not be designed....You also fail to mention the possibility that additional home PC growth could be generated by the new functionalities being handled by home PCs (in the future).... The PC companies that should be more concerned (of in-home internet appliances) should be Gateway, Packard-Bell and all others that see the low-end as crucial to survival. Conversely, if these companies are weakened or put out of business by the rapid acceptance of in-home internet appliances, this (the success of in-home internet appliances) could have a (very) positive impact for companies like Dell who compete against these weakened competitors in other sub-segments of the computer market. < Margins will errode as competitors get the model down and the PC becomes more commodity focused (did you see the announcement about the Korean company with the $499 Window's based PC - built like an Imac clone???)> It is erroneous to assume automatically that lower ASPs lead to lower margins.... The $499 machine that you listed can not run ERP software, so is no threat to Dell in the corporate market (at this time)..Dell does not compete in the low-end of the market...The machine you listed in clearly geared towards the first-time, limited-use home computer user...until there is evidence that high-end consumer sales, or corporate growth is effected by this, it is an issue primarily for low-end PC makers to deal with..... Conversely, a continued erotion of profits in the low-end PC market could force an exiting of some of Dell's competitors in selling PC's.....which would consolidate competition in OTHER sub-segments.... PC..which in turn would be good for Dell... Being the most effecient producer....Dell is in the driver seat in the sub-segments where technology is comparable..