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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (1995)	10/1/1998 2:28:00 AM
From: Bilow	Read Replies (2) \| Respond to of 2578

Hi Chuzzlewit; True, that a vertically integrated manufacturer suffers risk at each level if sales of PCs slow. But when that happens, the horizontally integrated manufacturer suffers the same risk. I think rudedog may have been extolling the virtues of a touch of conglomeration. :) In addition, the horizontally integrated manufacturer is subject to being replaced by the other manufacturers. -- Carl P.S. My mom is a big single malt scotch fanatic, and brings the stuff back from England (sometimes perhaps not entirely correctly, as the customs limit is quite small). Most of the stuff makes me ill. Glenlivet, on the other hand, I am quite fond of, and is easily available here.

To: Chuzzlewit who wrote (1995)	10/1/1998 8:16:00 AM
From: rudedog	Respond to of 2578

Chuz - True vertical integration raises both the risks and rewards in a business where the interfaces are clearly defined between the vertical layers, as they are in the present computer business. Clearly the risk exceeds the reward in today's climate. Dell (like CPQ before it) has chosen to limit that risk by creating close partnerships with key suppliers (MSFT, Intel and others) and providing good alternatives for the true commodities. As some have pointed out, IBM still maintains a high level of vertical integration (SDRAMs, Disks, etc.). IBM would not have been able to make that strategy work without alternative outlets for most of those products, so from a business perspective they are more like a conglomerate than a vertically integrated company, except in their mainframe line. Even there they are moving to inclusion of more commodity products. Given the scale of manufacturing required for most of the key components in the HW business, I doubt that traditional vertical integration has much economic justification today.