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Why You Don't Want Dell
Posted July 11, 2011
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By Dana Blankenhorn
Dell (DELL) is the dog analysts love most.
Bret Jensen calls it cheap "at these levels." Jim Van Meerten notes it trades "at a discount." Ron Sommer calls it "undervalued."
But there are good reasons for this.
Dell, like most tech companies, had one trick. Its trick was mass customization. By keeping inventory low, by making PCs to order, Dell gained a cost advantage over Asian rivals that shipped PCs over by the container-load, then sold them through distribution channels.
Stable PC technology killed this advantage. Dell has since sought to go deeper into China than rivals, taking advantage of even-lower labor costs than on the coast, and it has moved into storage systems against HP (HPQ) and EMC (EMC), and it has sought customization revenues by buying Perot Systems. READ FULL ARTICLE
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