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

To: SirVinny who wrote (109836)	3/17/1999 12:35:00 PM
From: Gabriel008	Read Replies (1) \| Respond to of 176387

I've heard the same rumor but it doesn't make sense to me. IBM's PC business excluding servers account for over 10 million units per year. DELL sells 8 to 9 million PC's per year. For DELL to absorb this enormous volume they would need to more than double their capacity or take over some of IBM's manufacturing plants. That is a huge logistical nightmare - akin to Compaq taking over DEC - with no guaranty that they could drive higher margins given continuing price erosion and declining margins in the overall PC market. DELL has been smart to stay out of the quicksand known as sub $1000 PC's which is now becoming the sub $600 and soon the sub $300 market. This segment of the market is a losing proposition. I suspect that DELL will continue to enter and compete in only those product categories that generate higher profit margins, permit their direct model to maximize market share and generate superior ROIC via their outstanding asset management skills.