A few stories on Dell today.
What's in the prognostication of an analyst? Just like the market, there are at least two sides to every analyst's report.
San Jose Mercury News, Calif., Silicon Street Column
Mar. 22 (San Jose Mercury News/KRTBN
DELL SELLING UNDER $1,000: Dell Computer Corp. (Nasdaq, DELL) did the
unthinkable last week with surprisingly little fanfare -- and precious
little commentary from Wall Street or the media: It introduced a sub-$1,
000 personal computer.
Dell telegraphed the move last month when it reported year-over-year
quarterly sales growth of 38 percent that so disappointed Wall Street.
But the introduction of Dimension PC with 15-inch monitor for $999
marks the end of an era for a company that up until last year continued
to profess an aversion to machines below the noble $1,000 price point.
Make no mistake: This thrusts Dell into the snake pit with everyone
else.
"Dell can't get the unit growth it wants unless it plays in the sub-$1,
000 market," says Daniel T. Niles, the BancBoston Robertson Stephens
analyst who earned more than 15 minutes of fame for accurately
predicting Dell's flagging sales. "People should not be owning Dell at
this point," he adds. Those who do own the stock "are over-discounting
the effect of (Dell selling the inexpensive computers). It'll probably
be another month or more until people digest this."
Nationsbanc Montgomery Securities analysts Kurtis R. King sees things
differently. "It's an incremental business for Dell," he says,
referring to the triple-digit boxes. "It's what supports the growth
story."
For those who have lost track, Dell's stock price plunged from more
than $50 a share on a split-adjusted basis to near a split-adjusted $40
when Dell dropped its revenue-growth bombshell. It closed Friday at
$40.25, meaning it hasn't budged much since the announcement. The
company hosts analysts in Texas on April 7 and 8. Such gatherings
normally are love-ins. It will be interesting to see how Dell spins its
embrace of cheap PCs.
Yeah, but don't forget about China, Brazil, and India, you spin-meisters...
--------------------
Here's the result of ignoring the rantings of analysts and just taking care of business...
Forbes ASAP's '100 Most Dynamic Companies' Produce the Most Explosive
Year of Growth in the History of the Electronic's Industry
BURLINGAME, CALIF. (March 22) BUSINESS WIRE -March 22, 1999--Forbes ASAP
magazine today announced that Dell Computer topped its annual "100 Most
Dynamic Companies" list.
It is Dell's second consecutive year at the top. To most, this is not
a surprise. But the other winners such as Citrix, which is leveraging
the power of server-based computing and Broadcom, which is making the
tools for the new digital age, definitely are. These companies
illustrate new paradigm shifts taking place in the industry.
"Thanks to the extraordinary growth of the Web, 1998 was one of the
most explosive years for growth in the history of the electronics
industry," says the magazine's editor, Michael S. Malone. "Everybody
knows how hot the Internet industry companies are, but what is less
appreciated is how 'dot com' has transformed the entire electronics
industry. Almost every company on our list figured out how to use the
Net to its best advantage--and was amply rewarded for doing so."
"These are all impressive companies," adds Malone, "but when it came
to the overall winner, there was little doubt. Dell has successfully
redesigned itself--a move that destroys many big companies--at least
three times. Last year saw the culmination of its biggest reinvention
to date: becoming an online marketer. It was a breathtaking move, and
one that stands as a model to the rest of the industry. Obviously, it
hasn't come without a few stumbles, especially with the stock market,
but at the end of the day, Dell stands as a shining example of an
adaptive corporation."
One interesting fact about this year's list is the mix: big,
established companies and very young newcomers. Thus, Yahoo, AOL and
Amazon.com led the Internet list, but just behind them was meteoric
rookies eBay (4) and NetGravity (5), which only went public in June
1998. In semiconductors, tiny $37.9 million Rambus (2) beat out mighty
$26.3 billion Intel (5). And in hardware, Apple, floating on the
success of the Internet-ready iMac, made its first appearance on the
list at no. 4.
Another interesting feature of this year's Forbes ASAP Dynamic 100 was
its geographic diversity. Silicon Valley's hegemony on hot companies
may be fading: More than half the firms on this years list and four out
of the seven category winners are from places other than Silicon
Valley.
Not all the stories connected with the Dynamic 100 were about success.
Forty-eight dynamic companies fell off the list this year. Some, such
as Semitool (no. 8 in semiconductors) and Manugistics (no. 2 in
software), caught the Asian flu and fell behind. Others, such as Oracle
(no. 32) and Cnet (no. 5), had solid years but simply couldn't keep up
with explosive industry growth. Even mighty Compaq fell from no. 2 in
hardware in 1997 to no. 5 in 1998.
The criteria for choosing these dynamic companies, derived from
industry analysts, was the combination of responsiveness to change,
market opportunity, marketing expertise, human capital, alliances &
partnerships, and prospects for growth.
The winners in each category are as follows:
In Hardware: Dell Computer, Round Rock, Texas (1998 revenues $12.3
billion). Dell's revenues jumped 59 percent in 1998 even as the company
transformed itself into the Web's largest online seller.
In Software: Citrix Systems, Ft. Lauderdale, Florida ($248.6 million).
The world leader in the server-based software.
In Peripherals and Manufacturing: Sanmina, San Jose, California
($722.6 million). One of the largest makers of high-end printed circuit
boards and among the most profitable.
In Semiconductors: Broadcom, Irvine, California ($203.1 million). A
little silicon company that's made good on a high-speed modem-on-a-chip
targeted at the Internet and TV.
In Networking and Telecom Equipment: Cisco Systems, San Jose,
California ($8.5 billion). The biggest hardware (routers, switches and
hubs) supplier to the Internet generation.
In Telecommunications: Qwest Communications, Denver, Colorado ($2.2
billion). Operates a popular high-bandwidth network for the Internet
that's e-commerce ready.
In Internet Services and Content: Yahoo, Santa Clara, California
($203.3 million). A key player in cyberspace, running the most popular
pure-play portals.
Says Malone, "Nineteen ninety eight was one of the most riotous years
in the history of American business, thanks to a skyrocketing stock
market, a surging economy and a new generation of technology. Every
company in tech, to stay alive, had to be dynamic. So to have made this
list, one had to be truly extraordinary."
About Forbes ASAP
Forbes ASAP is the technology supplement of Forbes and a leading
magazine of the digital revolution. It is available to all 784,000
Forbes subscribers.
-0- ym/cgo*
CONTACT: Forbes ASAP
Ann McAdam, 650/796-2229
E-mail: annmc@forbesasap.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: PUBLISHING COMED COMPUTERS/ELECTRONICS
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