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

To: stock bull who wrote (124908)	5/14/1999 9:57:00 PM
From: Grandpa Joe	Read Replies (6) \| Respond to of 176387

PW Report Summary: I found this on another site. Someone else summarized it so I cannot vouch for its accuracy or truthfulness: "DELL not immune to industry conditions which PW sees as getting more difficult as the year progresses. Pricing is aggressive and getting worse. Indirect players have reduced inventory to levels more comparable to DELL enabling them to compete more effectively. ASPs under pressure - a 1% drop in gross margins to about 21% without a corresponding increase in volume could cause DELL to miss Q1. DELL dependence on N. America for revenues increases risk of Y2K related slowdown in 2H. Any benefits from Y2K already realized. PW expects DELL to meet or slightly exceed $0.16 estimate for Q1, but downgrading due to difficult outlook." I think this guy just doesn't understand the PC market. Any volunteers out there to educate Mr Young? What "indirect players" with low inventory levels is he referring to? The only one close is Apple, and they really don't compete with Dell. Compaq, of course, stuffs the channel. Gateway has not achieved the efficiencies that Dell enjoys nor do they compete in the Corporate or Government area. HWP is dividing in two and will take several quarters to figure that out. IBM is still losing money in its PC business. He talks about lowering ASP but ignores gross profit margins, i.e. lower component costs. He ignores the new high margin areas Dell is entering, e.g. storage. He ignores the fact that CPQ is in a state of turmoil and Dell will be eating their market share, i.e. increasing unit sales and revenues which offset lower ASP. Ignores Dell's growth overseas. Ignores all the industry people who say the Y2K may have been addressed at big companies but the small companies are expected to replace equipment in 2H. Also Dell gets a big boost in 2H with Government contracts, and they are way behind Y2K compliance. Gramps P.S. If this is an "industry condition" then why didn't he downgrade all the other PC players? Makes you wonder.