To: KM who wrote (103038 ) 2/19/1999 2:39:00 PM From: Knighty Tin Read Replies (1) | Respond to
Trufflette, Interesting article. Her tone was right though she sure missed some important information. 1. "Pending slowdown in pc sales." Last year was the first down year EVER. The slow down is not pending. It has happened and is getting worse. 2. I can understand her concern about Dell going into sub $1000 boxes, but I don't see where they have a choice. That's their only chance. High end box sales are dropping much faster than low end; business sales faster than consumer sales. If they remain high end, they will probably gain market share in a collapsing niche. They tried servers, and after they jumped in, server growth went to hell in a handbasket. Yes, they gained share, but the market up and died on them. Whereas pc servers had been growing 40-50%, they grew 8% last year. And that only because of IBM's channel stuffing counting as "sales." So, Dell is faced with giving up revenues or margins. IMHO, he is wise if he opts for the latter. But it is a lousy set of options. Assuming they make a good $600 box, why would anyone pay $1500 for a box that does the same stuff? The problem is not Dell's boxes, it is the mpcs and the operating systems and the other apps. A business, especially, simply does not get any bang for an extra 100% or more in price. 3. She never mentioned Dell's grotesque valuation. Could that have something to do with the slippage when they prove human? <g> 4. And, of course, she never mentioned that this slowdown in revenues actually occured last quarter, but the company covered it with a receivables dump. Why did they postpone the hit to this quarter? I have my opinions, but I will keep them to myself on this hostile thread. <G>
