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

To: Eggolas Moria who wrote (111291)	3/23/1999 5:22:00 PM
From: BGR	Read Replies (1) \| Respond to of 176387

Gary, If you are willing to accept Emachines' CEO's statement at face value, why not do the same for Kevin Rollins' comments that were posted today ... which indicate a smooth sailing for DELL in the 1st quarter? Who has his head in the sand now? -BGR.

To: Eggolas Moria who wrote (111291)	3/23/1999 7:45:00 PM
From: Mick Mørmøny	Read Replies (1) \| Respond to of 176387

Anyone for sub-$1,000 PC, sub-$500 PC, $299 PC or free PC? Help yourselves! Computers: $299 PC Hurls Shockwaves At this pace, it's almost plausible that PC makers will one day pay us to use their computers. Microworkz Computer blew up a storm in the PC industry last Monday when it unveiled its $299 Webzter Jr. desktop PC, complete with a year's free Internet access from EarthLink Network (NASDAQ:ELNK - news). The Seattle-based upstart is undercutting the bigger players to crack open a whole new market of first-time PC buyers who want to connect to the Internet. And Microworkz is not alone. In the fourth quarter of 1998, eMachines weighed in with its South Korean-made $399 PC. The company already sold 180,000 units to customers and pre-sold 700,000 units into the channel during the quarter, quickly catapulting itself into the 6th place spot behind Apple Computer (NASDAQ:AAPL - news) . With Intel (NASDAQ:INTC - news) , Advanced Micro Devices (NYSE:AMD - news) and Cyrix fighting over the low-end of the chip market, component costs just keep falling, making ever-cheaper PCs possible. Firms like Microworkz and eMachines have been most aggressive in seizing the price lead, making up for their lack of established brand recognition. They run no-frills web sites, rely on word-of-mouth advertising, use older chips, charge for service, offer limited warranties, don't prepackage Microsoft Office on the machines, sell CD ROM drives as additional items, and don't always include a monitor. Sub-$500 PC Last year it was the sub-$1000 PCs that pushed year-over-year PC unit growth above 15%. This year, with demand already faltering, the sub-$500 PC segment looks like the saving grace to boost industry growth. And that's what has the bigger players sweating. It is going to be difficult for IBM (NYSE:IBM - news) , Compaq (NYSE:CPQ - news) and Hewlett Packard (NYSE:HWP - news) , with their heavy overheads, to carve out a profit in this niche. At the same time, they aren't going to stand by while upstarts steal market share in the fastest growing segment. Compaq, which was quick to jump on the sub-$1000 bandwagon, is the leading candidate to jump right in with a low-priced PC, regardless of the effect on its bottom line. Interestingly, in February, eleven Compaq insiders sold or filed 144 intentions to sell more than one million shares at prices ranging from $41.11 to $47.50 a share, according to Insiders' Chronicle. Compaq was recently quoted at $30.13, down 41% from a 52-week high of $51.25. Once Compaq cuts prices, IBM and H-P (which is aggressively pursuing low-cost peripherals, like printers for under $100) will likely cut prices too. Dell Computer (NASDAQ:DELL - news) , whose cheapest PC sells for $1199, will be the notable exception, abstaining from the sub-$500 market and confining itself to more profitable avenues. Make no mistake, the sub-$500 PC market is here to stay. But it is going to be tough on revenue growth (they now have to sell 2 or 3 boxes to make that same $1000) and even tougher on profits. Not that Microworkz and eMachines make a profit, but as demonstrated by Amazon.com (NASDAQ:AMZN - news) , in the world of e-commerce making a profit is not a prerequisite to staying in business or shaking up the competition. As could be expected, Microworkz and eMachines are already planning their IPOs. eMachines hopes to be profitable later this year, a dubious claim, and it ambitiously hopes to break $1 billion in sales. Microworkz had sales of $39 million last year, and is aiming for a more conservative $150 million this year. Bottom Line: It all shakes out to be good news for consumers and bad news for most PC manufacturers. Although shares of many box makers are down significantly, aside from Dell,we still recommend steering clear of the sector. fnews.yahoo.com