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

To: Skeeter Bug who wrote (115761)	4/9/1999 7:48:00 PM
From: Sarkie	Read Replies (1) \| Respond to of 176387

Just out of curiosity... How in the world does one keep up with this thread when there are so many post every day? I, myself have been concerned about posting. Thought everyone would think there were too many bugs around.

To: Skeeter Bug who wrote (115761)	4/9/1999 8:06:00 PM
From: Chuzzlewit	Read Replies (4) \| Respond to of 176387

Skeeter, gc never has data. We really have a series of interconnected questions. Assuming that the entire PC industry took a hit last quarter in terms of total revenues, the question is why? There are several possible answers -- 1. Increasing competition between the players either at the assembly level or the component level; 2. Cannibalism of existing markets through switching to less expensive machines; 3. Y2K-related decreases in spending; 4. There is no need for corporations to upgrade existing machines. Probably all of these issues played some role to a varying extent. However, since I am an investor in Dell, not an investor in the PC industry I believe a narrower focus is in order. If the first answer is the major factor, then I do not believe it is a problem for Dell, because Dell has repeated demonstrated that it can quickly adapt to a hostile pricing environment and be profitable, while its competition cannot. Furthermore, some of the server pressure may in fact be the result of Dell's entry into the arena (Dell doubled its market share y/y according to IDC). So if #1 is true that seems to me to presage industry consolidation. If the second answer is the cause, then it could cause problems for Dell. I don't know that there is evidence of corporations shifting to cheap machines. Undoubtedly there was some shifting, but my guess is that the vast majority of such machines are being sold at retail, and this may be the cause of much of CPQ, IBM and HWP's problems. The third possibility is decreased corporate spending because of frozen IT budgets associate with Y2K remediation. This is possible, and indeed Kumar has alluded to an expected resurgance of corporate purchases beginning in 2000. If this is the case it will take pressure off of all of the players, but I expect that Dell will once again be nimble enough to take full advantage of the opportunity. The final possible problem is that corporations do not need new machines for whatever reason. This is the most dangerous of the possibilities, yet I believe that it is the least likely because of the healthy increases in unit volume. Were this the case I would expect that unit volume would have been stagnant. In short, I believe that this played an insignificant role, at least as far as Dell is concerned. TTFN, CTC