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

To: jim kelley who wrote (129282)	5/27/1999 12:49:00 PM
From: rudedog	Read Replies (1) \| Respond to of 176387

Jim - This is palpable BS that you are spewing. I'm sure you are a little defensive after the last few weeks action in DELL stock, but keep in mind that I am also suffering substantial pain here and have no reason to paint a false case. You say more about yourself than about me when you take a facts-based discussion and label it as "palpable BS". You need to take your head out of the sand. What are DELL's gross margin's in the desktop market? Do you Know? A rough cut on DELL's margins in the desktop space... They are at 18% Intel-based enterprise products business, with the rest being desktop. Their enterprise product pricing is at market so they presumably are doing at least as well in those products as CPQ and HP, who have better than 35% margins on the server products and better than 45% on storage products. Let's assume that DELL is no more efficient than HP or CPQ, even though we know they are. So the margins on the enterprise lines, which are about evenly split between systems and storage, are probably at least 40%. We also know that overall GM was 21.5%. It is therefore straightforward to say that overall GM =(enterprise GM * percent enterprise revenue) + =(desktop GM * percent desktop revenue) since this comprises 100% of GM. Solving for desktop GM we get (total GM / percent desktop revenue) - ( enterprise GM * percent enterprise revenue)/ percent desktop revenue)= desktop GM. This yields desktop GM of 17.45%. Since overall GM was lower than expectations, but enterprise GM was healthy, desktop GM is obviously putting pressure on overall margins. Spewing simple math, not "palbable BS". Oh... and what about the efficiency of manufacturing batches of products that are all alike being more inventory efficient than DELL's BTO. I suppose that CPQ has not had any inventory problems. CPQ has not had any inventory problems in Consumer products, except that they did not make enough and had shortages. The consumer model is designed to have zero inventory or a slight shortage at the end of a cycle. We were talking about consumer here, not commercial desktops. It does not bother you, that DELL's inventory management is the best in the industry and CPQ's is the worst. Give us all a break from this cynicism. The question is not who has better inventory management - this was a discussion about DELL's ability to leverage their model in the consumer PC space, something they have not yet done. Your mindless cheerleading adds nothing to the discussion - but it might cause already overextended DELL investors to buy on the basis of a consumer product announcement which in fact might be a bad decision for DELL. Do you care about giving reasonable perspectives on the potential impact of decisions DELL might make, or do you want to take another opportunity to bash CPQ? This is about DELL...