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

To: Bilow who wrote (2189)	10/23/1998 8:18:00 PM
From: DoggyDogWorld	Read Replies (1) \| Respond to of 2578

Your thesis errs by defining DELL as a "box builder". They are in fact a "box seller". DELL has little or no EVA in the engineering and manufacturing arena. Chip vendors already do most of the engineering and third parties (including Intel until recently) do a lot of the manufacturing. DELL just sells. DELL's differentiation is their sales model. By eliminating inventory and sales tax, they have a 10% cost advantage over CPQ, IBM, HP, etc. In a market of highly differentiated products this advantage can be obscured by clever sales and marketing tactics. As the boxes become indistinguishable from one another, the cost advantage dominates. INTC competing against DELL is a different story. If integration does force a battle INTC has more at risk than DELL. DELL could buy AMD and S3 for 5% dilution. The instant INTC starts selling boxes to end users, though, they face massive OEM defections. Keep in mind that CPQ, IBM, and HP already have world-class inhouse CPUs. Microsoft will be all too willing to help them break INTC.