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

To: Jeffrey E. Klein who wrote (94973)	2/4/1999 9:45:00 PM
From: Don Edgerton	Respond to of 176387

If Chip prices drop, Dell upshifts to next level processor speed and tries to hold ASP. If you hold ASP and unit sales increase 56% as has been reported and your variable costs drop or stay the same, then you should grow profits at least as much, maybe more as fixed costs are spread over the higher unit volumes. With the average sale likely approaching the 400mhz level, those who bought 200/233s must be about ready to upgrade again. Believe DELL gets its fair share of gov't business and I believe that gov'ts still have a lot of Y2K upgrading to do. (as a token of its appreciation for gov't business Dell donated 32 machines to the USS Missouri Battleship Memorial. When the interactive displays are on line 2000-3000 visitors a day are likely to interact with a DELL. And Dell only spent maybe $100K for that type of exposure which includes many Japanese. Don't think DELL would be building a new plant if demand were slowing ( and I don't think Apple would be adding LG as a contractor if iMacs weren't flying out the door.) According to Kumar, CPQ may end up with another inventory problem. But I don't trust these so called "channel checks". Anyway, it was a bloody day. Not sure why increased price competition in PCs/chips would hurt MSFT unless the elasticity of demand on PC pricing is now 0. May give me a chance to do my leap spread no brainer which assumes little or no gain in MSFT. Don

To: Jeffrey E. Klein who wrote (94973)	2/4/1999 10:17:00 PM
From: corporal spewchunks	Read Replies (1) \| Respond to of 176387

Jeffrey, I am aware of Dell's 333 machine and its price tag. But it's still over $1000. You can buy a comparable processor with a smaller hard drive now for $700 or less. I am not sure what INTC's specs are going to be for their new celeron, but all the low end producers have been buying from AMD et al because their chips were better than the celeron. I am not sure that INTC has to lower their pricing all that much to knock the others out of the box. Just improve performance. So the issue becomes whether Dell can produce their machine any cheaper with the new celeron. I am sure that Michael will be up to the challenge but the rocket ship may slow down for awhile.