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

To: Mike Perras who wrote (106786)	3/4/1999 8:09:00 AM
From: Jerry Miller	Read Replies (1) \| Respond to of 176387

84 1/4, 84 1/2 early trades.

To: Mike Perras who wrote (106786)	3/4/1999 8:21:00 AM
From: JRI	Respond to of 176387

Mike, on the thread, we have often spoke of the consolidation that is going on in the PC industy...although the commentators and analysts would rather focus on the fact that January was a slow month (when...and this has happened time and time again....they knew that: (1) January is a seasonally-weak period, especially for the low-end focused companies, and (2) business ALWAYS slow before a major product launch and (3) PC sales can vary quite a bit month to month...)..So, despite reports to the contrary.... the world is not coming to an end for the PC.. Back to business, an equally significant...and I would say much more significant trend is the consolidation of PC sales among the top 5 manufacturers (Compaq, Dell, IBM, HP, Gateway)...each quarter, this group has been taking away market-share from the other category (white box makers and smaller PC manufacturers)..It is clear that the strong are getting stronger, and the weak getting weaker...and this has profound implications.. Over the past couple years, we have Packard-Bell die on the vine...several European PC manufacturers go out of business.....serveral small PC manufacturers are outdoubtly questioning whether or not they can survive......additionally, it is clear that IBM and HP are struggling to even make a buck in the PC biz....Going forward, the 3 best-positioned PC makers appear to be Dell, Compaq, and Gateway... For IBM and HP, and this has been discussed on the thread, something had to happen...HP split-up is probably only a first-step.....I am predicting that eventually we will see HP have a reduced involvement in producing the hardware....and they will focus more on services, and profitable hardware (palm-size PC's, printers, etc.) where they have a unique advantage....they may not totally exit PC's, but they could well make a token appearance only...Already, they have changed their strategy from last spring (which was an aggressive grab for market share in PCs, and then a 180 degree reversal when it was realized that this was costing then big $$$, with no end in sight) in which they low-bid corporate accounts big-time...now, they are much less price competitive, and are willing to take "only" profitable marketshare in corporate accounts...this inherently means that they will have a much slower growth rate within corporate accounts... IBM is a similar story...remember who is running them....Lou Gertsner, a sales and marketing man deluxe, is not going to keep IBM making PCs just because of the its popularazation (by IBM in the 80's)...he will continue to produce PCs because it is the best use of IBM's capital, and the fact that it helps IBM entree into customer accounts for the more lucrative system business... Now, one could think that today's announcement is "only" about IBM making a lot of money short-term, and getting another service contract....underlying is....if this partnership is effective....why would IBM have to keep making PCs on the same scale as before...(when they can combine with Dell to get business for their service arm as effectively or more effectively...and certainly as profitably or more profitably than the pre-Dell arrangement...) More marketshare could be up for grabs, and soon...this has been going on for a while...but everyone seems to want to focus on a weakness in sales that should have been no surprise to those following the industry.... Dell/IBM..that is a powerful sales proposition indeed....Can you imagine Gateway trying to sell a corporate account (vs. that?)