I don't think anyone expected much of a turnaround in Q3. As a matter of fact, I think that most just hoped they'd make the nickel consensus. Appears they'll do that as I would think that they woulda warned by now. Everything hinges in the announcements that they may make with earnings and the forward-looking statements made in the cc. Here's the article that you posted the link to: Compaq now a victim of anti-Dell move to Taiwan
Earlier this year, we reported that Compaq had revisited all of its relationships with its Taiwanese
OEMs and had struck hard deals in a bid to compete successfully with Dell and its direct doings.
It's a surprisingly little known fact that boxes sold by many of the big PC manufacturers are mostly
built using components which come from Taiwanese manufacturers. In the old days (five years ago),
many of the parts were built on the small island itself, but latterly have been outsourced to mainland
China, where the average salary of a PC worker is $30 a month.
But the deal which Compaq struck, which looked like it might be a good one, has come back to haunt
an already haunted firm. According to the Wall Street Journal, Compaq, like HP and Dell before it, has
now acknowledged the recent earthquake on the island will have an affect on its ability to supply the
lucrative Yule market.
Although Compaq says the difficulties will cause only spot delays, it is more bad news for Ben
Rosen's firm. Insiders tell The Register that its next set of results, due out in two or three weeks or so,
will not show much of a turn round.
Of course, it is not just the Big Q which is having PC troubles. Both Dell and HP have said they will be
affected by similar problems. And, almost unnoticed, Big Blue said last weekend that it was axing a
large number of jobs in its PC division. Many of these firms have all their PC eggs in a Taiwanese
basket, when just across the water, mainland China continues to rattle its sabres.
A few years back, Her Brittanic Majesty Queen Elizabeth II complained that she had an annus
horribilis. Just what is it about soccer teams, royalty and computer firms that makes them liable to
such cruel twists of fate? It can't just be bad management, but we are loath to accept the astrological
explanation... ®
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