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

To: BGR who wrote (111279)3/23/1999 5:11:00 PM
From: Eggolas Moria  Read Replies (2) | Respond to of 176387
 
<<2. Emachines, Microworkz and gang getting serious about losing money by undercutting the big boys>>

If you go to e4me.com and read the press coverage, you will find a recent piece in which the CEO claims they will be profitable this year.

<<4. And finally, market share battles>>

Absolutely, positively agreed.



To: BGR who wrote (111279)3/23/1999 6:06:00 PM
From: Michael Bakunin  Read Replies (1) | Respond to of 176387
 
Bukun,

I think your analysis of the forces pushing down both ASP and margins (which, imo, are of equivalent importance) is quite good. I disagree with a bit of it.

ASP and margin (which is more important than ASP

If you mean dollar margins, I agree. However, percentage margins do no good if the base (ASP) is falling.

AMD getting serious about losing money

AMD can't afford not to fight on price. K7 and 0.18 mu mean attacks higher on the price curve. Xeon margins, anyone? See ASP; apply to server market.

Emachines, Microworkz and gang getting serious about losing money by undercutting the big boys.

I don't think Emachines is losing money, not 'til the Won goes up more. They're the biggest threat to retail PC margins I've seen. Others claim PCs are the next cell phone (e.g., free PC for ISP), but I don't think we're there yet.

Wall Street's tacit approval to (and even preference for) revenue growth at the cost of earnings loss

This should change, but that would impact Dell's price negatively. Trailing PE over 50, and no cyclical bottom.

Win2000/NT5...memory and processor hog

One of the few clouds on my PC puts' horizon might be something to restart an upgrade cycle with a vengeance. I don't think Win2K is it. Maybe voice recognition.

mb



To: BGR who wrote (111279)3/23/1999 7:42:00 PM
From: rudedog  Read Replies (1) | Respond to of 176387
 
In particular if Win2000/NT5 turn out to be the memory and processor hog many expect it to be
yes but this will have no impact on any significant sales in '99. Are you saying wait for '00 for relief?

All four of your points put pressure on DELL margins and ASP in the near term. DELL needs to solidify its upscale move, or show payoff on a diversification strategy, if they are to stay on track for the next 6 months.


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