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Interland, Inc. (INLD) Message Board

  • BlueHorseshoe10 BlueHorseshoe10 Nov 22, 1997 1:46 PM Flag

    Why increase in sales, but decrease in p

    Does anyone have any information or thoughts on why Micron Electronics and Gateway 2000 have been increasing their revenue so dramatically, but decreasing their profits? Are they selling too cheap?

    Why can Compaq and Dell keep making profits, while Gateway and Micron are not continuing to make nice profits? Are they producing their computers cheaper than Micron and Gateway?

    Aren't they all just assemblers of parts? Does Compaq and Dell pay less for the parts than Micron and Gateway? i.e. Intel, Microsoft, Creative Labs, U.S. Robotics, etc. are selling at a lower price to Dell and Compaq than they are to Micron and Gateway?

    I don't see how overhead could be Micron and Gateway's problems, I would think it is just as low, if not lower than Dell and Compaq. I do know that Dell and Compaq have traditionally been the primary suppliers to businesses (in addition to IBM and HP).
    Maybe the profit margin on selling to large and medium sized corporations is quite a bit higher than the profit margin to household and small business consumers. So maybe the question is why is Micron and Gateway having trouble breaking into the large business customer sales? I think they both recently acquired companies that produce servers. Maybe that is the key to selling to large corporate customers. Do they (Micron and Gateway)have network problems, if so are they working with "network
    server" companies like Banyan, etc. to fix the problems?

    Anyone with information, thoughts, etc. please respond.

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