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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: jim kelley who wrote (52183)	3/16/1999 1:35:00 PM
From: Michael Bakunin	Read Replies (1) \| Respond to of 132070

Jim, A few thoughts: DELL can afford a price war..others will simply take losses If this argument were about Dell's chances of remaining profitable, you'd have it won. However, this is about their chances of growing EPS. In a cutthroat price war, those chances dwindle. How can..PIII [be] a complete disaster..?! Because it doesn't deserve its next-generation designation, and the market knows it. You will point to 0.18 mu, I to K7. DELL growth..out of..whitebox dealers or..big five Perhaps, but at what cost? See "cutthroat" above. DELL can afford to sell on reduced margins Reduced margins will crush EPS growth. volume will help the improve product margins through economies of scale in purchasing and manufacturing Dell's revenues are approaching $20 billion. What margins of scale can possibly exist that they have not already exploited? mb

To: jim kelley who wrote (52183)	3/16/1999 1:36:00 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 132070

>>Thus DELL can afford a price war whereas CPQ and the others will simply take losses. If DELL has the production capacity it can emerge the victor in a price /volume war.<< jim, the EXACT same argument was made for the leader in the disk drive market when the dd market collapsed. wars are won and lost, but few come away with out serious scars. at 50 times book and high, high expectations, small scars can smash dell's price, imho.