To: John Graybill who wrote (42970 ) 2/12/1999 10:59:00 AM From: SlowThinker Read Replies (1) | Respond to
I would interpret the drop in DELL a different way, John. Dell has done well in its direct business model because of the "always-declining" component prices and the fact that they don't have to hold as much component inventory as their non-direct competition--i.e., they can more quickly take advantage of dropping component prices. Well, component prices have been rising or holding firm--at least as far as DRAM goes--and Dell's competition has been changing their business models such that they don't have to hold as much inventory as they used to. Hence, not as much of an advantage for Dell. Also (and partially as a result of the above), Dell is seeing more competition from Compaq and IBM. IBM, in particular, is said to be getting more aggressive in defending its corporate business. In other words, more PC's are being sold--just not necessarily all by Dell. A slowing of Dell's growth rate from 54% in mid-98 to about 39% in January 99 doesn't imply that the world is ending with regard to PC sales.
