I was at Compaq in Houston recently, and had a chance to tour
the development labs. Very well run company. Margins are
razor thin, CPQ makes $35 on a $1000 PC. So, if a customer
has to call them they loose, they can't make mistakes on the
low end market.
Regarding servers, ProLiants, Tandem, etc. are high margin,
but they may seek to gain market share by adopting aggressive
price cuts in those markets.
Also, DEC will likely add several quarters worth of earnings drag
to CPQ. DELL and HWP will move in to Digital's accounts aggressively
during this transition.
-Ajay |
