Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: JRI who wrote (2444)	2/23/1999 1:20:00 AM
From: Jim Bautch	Read Replies (1) \| Respond to of 2578

John, You obviously posted to this thread out of ignorance and with the attempt to get a few responses from us bears on dell. Well, I've got one for you. Have you ever heard of TV's, radios, stereos, and calculators. Surely you have, and it does not take a rocket scientist to figure out that they each are high commodity, low revenue products with diminishing ASPs. What do you think the future of computers, servers and storage devices bring. Same old sh-t. Good luck. Tico

To: JRI who wrote (2444)	2/23/1999 12:24:00 PM
From: The Phoenix	Respond to of 2578

I absolutely agree that consumers that do not currently own PC's will be more apt to once they see the value of the internet - brought to them by low cost residential gateway devices. But these consumers will be purchased low cost <$800 machines - a market that DELL doesn't play in. DELL is now begining to target this lower end market and with it margins will slim somewhat. The business market - DELL's traditional market will also see some softness after y2k is behind us. So, I believe that DELL is a great franchise, but I also believe the 50% growth days are over and DELL will begin to fall more closely in line with market growth rates going forward. I'd expect 35%-40% growth rates over the next year, shrinking to <30% after 2000. JMO OG

To: JRI who wrote (2444)	2/23/1999 2:23:00 PM
From: Marq Spencer	Read Replies (1) \| Respond to of 2578

> Take a look at FedEx.. ... information-processing machines like PC's, handhelds, etc..Well, I am one of the least technically literate here, but I can very well see their complementary nature (winning out)...And most everyone having one (or more) of each....< John, Your analogy is incorrect. If Dell's only competition was handhelds and internet devices, I'd be long on Dell bigtime (I have a very short horizon (weeks), and currently I'm slightly bullish after last week's pullback; I'm bearish on Dell for the long haul. The problem for Dell isn't the threat of handhelds and internet devices replacing the PC, it is the other PC manufacturers who are aggressively competing with Dell. A better analogy is Levi's. Their claim used to be that high-end jeans, with "Levi's quality" (read brand-name) can command a premium. See what's been happening to them. The mass market goes for the cheaper product all the time (actually, Dell's early success was due to this - they were very price competitive). The problem is that PC's are becoming a commodity. There is no major threat to the PC's from the handhelds, etc in the near term. However, there is tremendous threat to one PC manufacturer from another. And there are way too many of them. I foresee tremendous consolidation in this industry over the next five-to-ten years (just like with TV's and refrigerators and washers and dryers and radios and automobiles and Mainframe, midrange and Unix hardware vendors...). With commoditization comes lower margins. Therefore, I expect Dell's growth over the next five years to be around 25% CAGR. That is extremely healthy for a company that's Dell's size and, in five years, would make them three times the size they are today. However, it implies PE multiples that are not as lofty as they are today. BTW John, I don't mind you posting here - I post on both the Dell threads myself <bg>. And we seem to have similar holdings elsewhere (CA still?) <vbg>. - Brian.