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

To: Dave B who wrote (117948)	4/15/1999 10:56:00 PM
From: Meathead	Read Replies (2) \| Respond to of 176387

Dave, I like the logic of your analysis. Use the word "FREE PC" and consumers/analysts/CNBC become mesmerized like little kids watching a magic trick. Well, considering many people need to hire a CPA to help them with the overwhelming complexities of "Schedule A", I'm not surprised. You are correct in your assessment that it's a payment plan for hardware. However, it is predicated on the belief that a percentage will keep their service after the contract expires, and lets face it, that's not a bad strategy as many people are a bit lazy when it comes to things like switching ISP's. In fact, a significant percentage will pay more than they should just to avoid the hassle of finding a new ISP and then re-configuring dial up properties if they're happy with the service.... basic human nature. Of course, in 36 months, the internet access game will look a whole lot different than it does today as will the power of your garden variety PC. ............................................. A free PC it is not. The ISP is liable for, and must recoup the cost of the hardware. Therefore they must charge you an amount AT LEAST equal to their basis in the hardware plus a small amount to cover operating costs and theft over the contract period. I expect to see price wars here too. How low can these offers go? Considering that a basic PC can be customized for just this purpose, ISP's cost could easily be only $300 or less. Tack on $50 for OPEX and what would a break even deal look like? How about $15/mo for 24 months. With this in mind, I doubt you would ever see higher quality more powerful and richly configured machines being offered with this advertising spin. The "FREE PC" advertisement might not be as exciting or enticing.... $36/mo for 48 months looks more like internet access that's waaaay to expensive! I would be interested to know what kind of deal exists between the ISP and hardware vendor. I can't imagine an ISP committing a ton of capital up front for these machines.... I would think that they too make payments. MEATHEAD P.S. excellent point about the intrinsic value of a cell phone vs. a PC.