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

To: Sig who wrote (107911)	3/6/1999 6:26:00 PM
From: Walcalla	Read Replies (2) \| Respond to of 176387

HI Sig, What does this mean for Dell? Are they not so special after all. IBM Talking With More Companies About Parts Sales JEFF BLISS c.1999 Bloomberg News ARMONK, N.Y. -- International Business Machines Corp. is talking with seven companies including Hewlett-Packard Co. and Sun Microsystems Inc. about selling them billions of dollars of computer parts following a $16 billion sales agreement with Dell Computer Corp. The world's largest computer maker is discussing expanded sales of disk drives, monitors and computer chips. In exchange, IBM will share its patents and product plans with the companies, all current customers, a person familiar with IBM's plans said. IBM Chief Executive Louis Gerstner is counting on sales of computer parts to compensate for slower sales of its mainframe and server computers. Among the potential buyers are EMC Corp., Cisco Systems Inc., Compaq Computer Corp., Acer Computer International Ltd. and Siemens AG, the person said. ''With all these other guys, this could be a big, big business,'' said analyst Stephen Dube of Wasserstein Perella Securities, who rates IBM ''buy.'' Parts sales to other companies accounted for $6.6 billion of IBM's $81.67 billion in revenue last year, Dube said. The sales under discussion range in value from hundreds of millions of dollars to more than $1 billion, the person said. Two contracts may be completed within the next three months, the person said. Armonk, New York-based IBM declined to comment. IBM rose 7 1/4 Friday to 178 1/4, its biggest gain since Feb. 11. Dell, the largest direct-seller of personal computers and one of IBM's top 10 customers, Thursday agreed to buy disk drives, video displays and other devices for seven years in what IBM said was the biggest agreement of its type. ''We have been contacted'' by IBM, said Larry Sennett, a spokesman for Hewlett-Packard's PC business. ''They are calling on vendors to investigate possible business opportunities.'' Sennett said H-P hasn't begun negotiations with IBM. In many of the agreements, companies are talking about buying more of what IBM currently supplies them. EMC, for example, is interested in IBM's high-capacity disk drives, the person said. EMC, the No. 1 maker of computer storage systems for corporate networks, declined to comment. H-P is looking at IBM's disk drives and computer chips that perform specific functions, while Sun is interested in disk drives, memory and computer chips, the person said. Sun wasn't available to comment. Compaq, the No. 1 PC maker, declined to comment on any discussions with IBM. IBM also is talking with Cisco about increasing sales of chips used in Cisco's networking equipment, the person said. Cisco wasn't available to comment. IBM's strategy of throwing open the doors of its fabled research and development division is a recent development. For years, the company guarded its patents as advantages over competitors. Last year, IBM won more patents than any rival. Slowing computer sales make it harder for IBM to justify its relatively large research and development budget -- which totaled $5.1 billion last year -- without selling its technology to other companies, Dube said. ''They don't have the revenue to cover that,'' he said. Walcalla -----