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To: rupert1 who wrote (56149)	4/9/1999 6:49:00 AM
From: rupert1	Read Replies (1) \| Respond to of 97611

From the Land of DELL April 8, 1999 Dell CEO Tells Investors That PC Demand Is 'Quite Healthy' Dow Jones Newswires By Christop NEW YORK -- Dell Computer Corp. (DELL) Chief Executive Michael Dell told investors here that the company's advantages over other computer companies are "as strong as they ever have been," and that business right now is good. As some investors have become worried that Dell's sales growth is slowing, company executives stressed at a twice-yearly gathering that its strength is sustainable. Dell said he sees a "massive upgrade cycle" as computer users migrate to Microsoft Corp.'s (MSFT) upcoming Windows 2000 software. And he said PC demand right now is "quite strong," adding that the overall market should grow by at least 14% a year through 2001. The company also touted its new $999 PC computer offering, introduced earlier this quarter. Dell, the No. 3 PC maker worldwide, had previously avoided the sub-$1,000 PC market. Paul Bell, a senior vice president in Dell's home and small business operations, said the cheaper machines are capable of delivering "attractive returns" because of the efficiency of the company's direct method of making and selling computers. Bell said the company will also be "aggressive" about pursuing lower price points in the future, too. Tom Meredith, Dell's finance chief, gave an upbeat presentation, saying he was "pleased" with the company's progress in the current quarter. "We will continue to grow at a multiple of the market," Meredith said. He said that for Dell shareholders, "The fun will continue," provided that the company execute its plans efficiently. Louis Mazzucchelli, an analyst at Gerard Klauer Mattison & Co. who has a buy rating on Dell, said the tone of the meeting was good. "I don't see anything that's changed from six months ago," he said, referring to the recent concerns about revenue growth. "It's like they're playing basketball and (Dell's competitors) are in a cast," Mazzucchelli said. Walter Winnitzki, an analyst for Hambrecht & Quist Inc., said the meeting's message was "very reassuring for investors." Because Dell didn't change any guidance, he said, investors should expect to see the company's sales continue to grow at a rate of between 35% and 40% a year, rather than the 50% rate in the past. "Relative to the rest of the industry, that (rate) is very healthy," he said. In the meeting, company officials said Dell is deriving between $1.4 billion and $2 billion from providing services. Much of that business Dell shares with third-party computer services providers, but gross profit margins tend to be higher in services than in hardware. Speaking about the first quarter, which was marked by concerns on Wall Street about a general slowing in the PC market, CEO Dell said PC demand increased at his company from the January quarter to the April quarter. "If our competitors are seeing light demand - not that they are (neccessarily) - that means we're taking more market share than we thought we were," Dell said. Finance chief Meredith addressed rumors that the company could expand further its relationship with International Business Machines Corp. (IBM) - rumors that heated after Dell agreed in the first quarter to buy $16 billion in parts from IBM. "I can't believe that relationship can't be enhanced over time," he said of the IBM deal. But he wouldn't directly comment on analysts' suggestions that Dell take over IBM's money-losing PC operations. "Have that conversation with Doug Maine or Lou," he said, referring to IBM's chief financial officer and Lou Gerstner, IBM's chief executive. In a rare nod to Apple Computer Inc. (AAPL), Michael Dell said that company's iMac computers were a "wake-up call" for the PC industry. Dell, who has criticized Apple in the past, said his company will likely introduce differently-designed machines in the next year or so.