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

To: Chuzzlewit who wrote (116109)	4/10/1999 10:45:00 PM
From: Meathead	Read Replies (2) \| Respond to of 176387

Profit is profit... agreed. But, GM would likely go down and people would holler. However, striking a deal as such would, in terms of profit, be less profitable than their lowest profit Dimension line. Dimension has GM's less than 20%. Dell buys the Intel mother board and CPU. Dell designs the chassis, does value add like spec the peripherals, configuration, write a Dell BIOS... etc. ect. The point being.... manufacturing. Is it profitable to tie up Dells PC manufacturing facilities to just manufacture? How much would they need to make to re-coup their cost of operations? How much capacity does Dell's current manufacturing expansion plans add above and beyond supporting their current growth rate? SG&A (where manufacturing costs are included) already eats up nearly half of the profit on a system ~10%. Although that percentage would drop as it wouldn't scale proportionally to the big revenue jump, it would still represent a significant chunk. Im not saying a deal like this couldn't be done a be profitable for both companies... it most certainly could. I just wonder if a deal like that is worth it. The longer term strategic implications would be a good discussion if Dell simply started out as a build house. MEATHEAD