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

To: JRI who wrote (117954)	4/15/1999 7:52:00 PM
From: edamo	Read Replies (2) \| Respond to of 176387

john...the kwek-shun is what be a server? by the time barron's figures it out, dell will be a $50b company... financial journalists aren't worth the paper they "right" on...save a tree...stop reading! ed a. john...think the dell range still holds...breakout soon...

To: JRI who wrote (117954)	4/15/1999 8:37:00 PM
From: kemble s. matter	Read Replies (1) \| Respond to of 176387

John, Hi!!! RE: CNBC I nominate Sig for an appearance on CNBC.... Best, kemble

To: JRI who wrote (117954)	4/15/1999 10:39:00 PM
From: Eggolas Moria	Read Replies (3) \| Respond to of 176387

John, I'll respond as to what I believe the article is saying. Just don't shoot the messenger. The writer (and her sources, obviously) believe that the pressure being exerted by the low-priced PCs (e.g., as eMachines) will be putting continued pressure on the prices corporations will want to spend for their PCs, which are currently fully configured. That will mean margin pressure, unless costs can continue to be taken out fast enough to offset the decline in ASPs. CPQ, with its large volume of low-price units is feeling the heat already. Companies such as DELL and IBM, which have substantial server business, will not be as affected immediately, due to the higher margins servers bring. In addition, IBM has a substantial services business, which the writer and sources believe is important with hardware prices declining. Gateway was a pick for a couple of reasons. First, it's PE ratio on expected earnings isn't as high as DELL: "The stock appears reasonably priced. Its P/E of 24x estimated 1999 earnings of $2.79 and 19x the $3.48 it's expected to earn in 2000, according to First Call, are below its projected 28% earnings growth rate in 2000 and its long-term growth rate of 25%." However, another reason is bandied without enough amplification, IMO. Gateway, with its large consumer business and YourWare concept, is beginning to use the PC as a razor, looking to capture the continuing high profits of on-line access (and one would assume a share of internet transactions as the site develops). Dell, with its decision to avoid meeting the mass market with sub-800 units and without a sub-1000 until recently, has a corporate business about twice the consumer level. That business isn't as likely to use a DELL Internet connection. There is a great deal more to Everett's comments about DELL intending to enter the consumer market in force than this thread has discussed. Clearly Dell Computer sees the future and is diversifying its revenue stream to capture higher margin revenues. One question investors will probably want to ask themselves (as opposed to religious zealots) is whether DELL will be able to capture those higher margin revenues quickly enough to offset the decline in ASPs such that the reported revenues and earnings will continue to support its P/E ratio. I don't have the answer to that, by the way. I tend to agree with the reporter that DELL is probably not going to feel the pressures quite as much or as quickly as CPQ and others. Whether that's enough to sustain the stock, I don't know. But since I don't have a position in DELL, long or short, I'm not too concerned. I'll be watching though. By the way, FWIW, I concur with the thesis that enterprise solutions will be more important in the future and that to capture the high margin business, one will need a substantial and effective service force (which may be in short supply - tough to build from scratch with labor shortages in the field). Was that balanced enough for you?<g>