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

To: jhg_in_kc who wrote (72104)	10/14/1998 10:40:00 PM
From: Chuzzlewit	Respond to of 176387

jhg, if Darrel is correct about the firming of prices being a non-issue (i.e., component pricing is continuing to decline), then the points I made should be ignored, or at least stored away if and when component price increases becomes a reality. All other things being equal, increasing component costs will have the greatest impact on manufacturers who maintain the lowest inventory levels, so if prices were to increase Dell would be affected to a greater extent than, say, Compaq. Electronic components typically decrease in price because manufacturing methods improve. If you look at mature electronic goods you can see this effect in action. Everything from CD players to televisions. As I recall, during the mid to late seventies there was a rapid escalation of prices, but even then the price of hand-held calculators fell rapidly. When people talk about the depreciation of good in inventory they aren't referring to it in the standard accounting sense. They are revaluing according to the rule of thumb "the lesser of book (historical cost) or market (current cost)". TTFN, CTC