[Edited] @rlweitz - Dell
I haven't heard "the volume" argument in the last time from
DELL. I would advise everyone to hear the last conference
call from DELL, where Rollins deeply discussed his sentiment.
Whether this is really relevant - its a wide field ...
Conclusion from his thoughts: AMD isn't able to provide us
with better "earnings". He is seeing added costs because
you have to build the infrastructure, make R&D and support
for new lines. These added costs will not be supported by cost
benefits from using AMD, especially because Dell is getting
very favourable prices from Intel. He didn't specify things,
but it was clear, that when AMD is coming "online", the
INTC-CPU prices will go up. Now you could do the math. How
many units AMD has to provide just to get DELL earnings-
wise neutral.
Don't get me wrong, these are not my thoughts, they came from
DELL and my opinion is, that they are only "true", when Intel
is a very healthy comp. situation. All the years it was
given, but not the last time, DELL is loosing servermarketshare to IBM and
HP (QoQ; Q2->Q3) and they are feeling more pressure on the
desktop side from OEMs all over the world. Is the pain already
just as big as necessary to introduce AMD lines, which is
imho relativly easy for a company like DELL.
edit: I think Dell will again loose Server-marketshare in Q4
and on the desktop-side they will at best hold. Whether this
is enough for all managers - we will see. But the story will
go on further. I don't see, why Dell will not loose more share
in Q1 and Q2, because Intel isn't able to provide a healthy
server-lineup which is as good as HP, because they don't have
AMD on board. When AMD is able to show great progress with
M2, then Intel is in real trouble and with them DELL. Then the
year 2006 will look really bad (server) for them. Do you also
see margen erosion, because the loose Software sales and service
contracts due to weaker server-sales?
