Day Trading & Forex Forum

Atilla

Buy Dell - as they are moving into enterprise computing

Sell HP - because they will lose market share to Dell

As a consequence of the credit crunch and tough market conditions large corporates and enterprise level companies are now considering replacing the all famous HP/Compaq brand of servers and desktops with the more cost effective Dell machines.

In some cases they are almost one third of the price of HPs.

This reminds me of the time when Compaq was a small upstart PC clone taking on the might of IBM PCs. Soon enough Compaq knocked IBM for six in terms of quality build, reliability and performance.

I know of a few FTSE100 companies considering this very option and these are likely to be global decisions, thus international sites will follow suits when the time comes to refreshing their hardware technologies (usually once every 3 years or so).

I'm expecting some levelling here, such that HP HW prices will come down and Dell will capture market share and their HW prices will rise. In the last 3-5 years Dell has underperformed HP. However, if you look at 1 year charts you can see recovery in Dell share price & earnings is greater than HP. I believe this trend will continue as Dell outpaces HP.

Hewlett-Packard Company - Google Finance

The only consideration is if Dell screw up on the reliability and support side of the equation. Based on their level of experience and quality builds this is unlikely imo.

This is a 3-5 year tip from yours truly...

As of 28 July 09
HPQ = $42
Dell = $14

Enjoy the ride...

__________________
Who moved my cheese?

Atilla

As of 27th August 09
HPQ = 44.81 6.7% increase
Dell = 15.65 11.8% increase

Double the increase...

Watch this space as Dell will eat into HP's market...

__________________
Who moved my cheese?