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

To: Ian@SI who wrote (130963)	6/4/1999 10:18:00 AM
From: Lee	Read Replies (1) \| Respond to of 176387

Hi Ian,..Re:. Your doomsday scenario strikes me as highly unlikely I'm guessing that the point Rudy is trying to make is that IBM, CPQ and HWP have significant alternative revenues, and therefore, could both participate and endure a protracted rotten price environment for the PCs. We've all speculated that Dell needs to either expand into the higher end enterprise arena or take some parallel path to alternative revenues. Preferably higher margin type. <g> Just for a point, you might find the Q1 IBM report interesting, especially where revenues come from as well as margins associated with their software business. Three months ended March 31, Percent 1999 1998 Change ------- ------- ------- REVENUE Hardware $8,584 $7,318 17.3% Gross profit margin 27.2% 28.7% Global Services 7,550 6,341 19.1% Gross profit margin 26.3% 27.0% Software 2,920 2,644 10.4% Gross profit margin 81.0% 79.6% Global Financing 705 719 -1.9% Gross profit margin 55.9% 47.1% Enterprise Investments/Other 558 596 -6.4% Gross profit margin 32.6% 33.1% TOTAL REVENUE 20,317 17,618 15.3% GROSS PROFIT 7,258 6,450 12.5% Gross profit margin 35.7% 36.6% Rudy, please correct me if this assumption if wrong. Cheers, Lee

To: Ian@SI who wrote (130963)	6/4/1999 10:57:00 AM
From: rudedog	Respond to of 176387

Ian - See my reply to meathead, I think the doomsday scenario is EXTREMELY unlikely and all indications are that the big 3 are going the other way - maintaining PC prices at the expense of share. This is an explicit policy at both HP and IBM. My point was more about DELL vulnerability in a "what if". A price war is not predatory pricing and it is not done by collusion among the big players. One starts dropping price in an effort to gain share. the others drop price to retain unit volume, and the thing starts spiraling down. Last man standing "wins" although the only one who really wins is the customer.