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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (57228)	4/24/1999 7:04:00 PM
From: gbh	Read Replies (4) \| Respond to of 132070

Michael, Micron (direct) vs. E-Machines (retail). Micron is shrinking with no hope of long term survival on its own. Therefore, I contend they don't count. Their customers will migrate to DELL and GTW. E-Machines, although currently the fastest grower, will also be a non-entity if they choose to stay ultra low end. They, like all others, will be unable to make money there. I think I read somewhere, they have something like 20 employees. Give me a break. And they are selling mainly to computer illiterates. And it costs money to call for tech support. Sounds like a scam to me. I predict they will never make it to IPO like they propose. And if they do, they will never show a profit. Might as well be E-Machines.com <g>. I would say that looking at the models does not support the tiny share of the direct sellers eating the lunch of the main stream participants. But direct now includes CPQ, IBM, and HP to varying degrees. And the trend certainly isn't in the other direction. The facts are, DELL and GTW are still growing nicely. But IBM, CPQ, and HWP are all struggling. BTO is the only way any of these guys can make money. Inventory is death. Gateway and Dell are more different than alike. One is consumer and one is corporate and you can't really lump them together. Isn't this what I said? But they are starting to target each other too. With Dell making more progress in consumer, than GTW is in business. Gary, you can't have it both ways. Gateway has 166 stores. The direct game is no longer direct for them. It is catalogue showroom now. It's inventory that kills, not a showroom. This is not SME. These "stores" are nice little holes in the wall. A place to touch and fell about 10 computers. Far different than what I think of as catalog showroom, like an SME. Dell has tried to get into the channel, as they realize the weaknesses of the direct system alone for long term growth. You know, you and Earlie have both stated this, but have shown no proof of it. I don't doubt you, but why can't I find any supporting evidence of this "fact". And lets assume it is true (which I don't think it is), it will continue to be BTO in some form. Inventory kills, remember <g>. No one knows or believes this more than MD. Of course the stores are marketing tools. So is CompUSA. Mike, CPU is retail. This is not marketing. If CPU had enough brand equity to survive with CompUSA brand, they would gut CPQ, HWP, IBM etc in a second. Dell and Gateway may be price competitive for the same features, but I contend that the bar in the back seat is not the mass market and that they cannot survive there alone. No doubt. They are wading slowly into sub 1K, while others are losing their shirts in sub 800 and sub 600. No one makes money here. E-Machines is not any different. They will lose too. I agree that you can't compare Dell and Gateway with CHS. They haven't been caught yet. Where's the <g>? I hope your not losing your sense of humor, the way you lost this argument <ggg>. Gotcha. Gary

To: Knighty Tin who wrote (57228)	4/26/1999 1:42:00 PM
From: edamo	Read Replies (3) \| Respond to of 132070

michael...dell, gateway, and rolls royce.."great comparison...too bad it has no bearing on reality... when did rolls royce go bankrupt...news to me and to the many airlines that stay aloft with rr engines....bar in the back seat...not standard but an option...sell ever vehicle they make..no leftovers or inventory... did not vw just buy the factory at crew, along with the ability to use the name so they could move into the upscale market...and of course bmw took over the bentley production... computers the same...no matter how much disinformation you spread to make your analysis of major computer sales viable...why enter the low end if not profitable...leave it to the e-machines of the world, who will crash and burn as their national predecessor hyundai did years ago.....dell will grow share, and profits....best regards, ed a.(dell shareholder and former rr owner)