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

To: jim kelley who wrote (129518)	5/28/1999 3:34:00 AM
From: stockman_scott	Respond to of 176387

<< business model parameters are changing as new businesses are added to the business mix. There has been little attention paid to this fact by the analysts or anyone else for that matter.>> Jim: I totally agree. Just wait until DELL adds new businesses / services in the next few months .. Its interesting that you examine margins more than most folks. On Thursday morning Merrill Lynch issued a report titled.."PC Hardware: Margins could be squeezed as consumer Prices Fall." Here are a few quotes to consider.... <<--Our view has been that PC unit growth is good, pricing will be cutthroat over time. The advent of the "affordable PC" should put pressure on traditional vendors. --Compaq may get hurt if this trend plays out given that about 30% of its PC sales are to consumers. HWP and IBM could suffer but less so. DELL is vulnerable, but we see its superior direct model as an offsetting positive. --Profits in the computer industry are moving above and below the PC. --We believe retailers aren't hurt by lower PC prices since they can more easily sell higher-margin software, service or financing offerings for the same total ticket price. Direct vendors such as DELL and GTW reap the same benefit acting as their own retailers and have focused heavily on sales around the box. Indirect vendors do not have the same ability to capture these incremental revenues since they go through the retailer.>> ------------------------------------------------------------------------------------------------------- DELL will thrive in the hypercompetitive consumer market. I sure feel sorry for their competitors..!! Best Regards, Scott

To: jim kelley who wrote (129518)	5/28/1999 10:34:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Good morning Jim, I don't disagree with your assessment that Dell did the right thing in lowering margins in order to capture sales. I am simply upset that it was forced to take that action. I would be much more upset had it not taken appropriate action and allowed gross profits to slip. Unlike many here, I don't believe that gigabuys.com will be a big deal as a driver of growth. I look to enterprise initiatives to accomplish that. You are correct in pointing out that new lines have different margins, and it is impossible to sort them out without specific information from the company. TTFN, CTC