Thursday July 22, 7:33 pm Eastern Time
Compaq's new CEO plans product rationalization
NEW YORK, July 22 (Reuters) - Compaq Computer Corp. (NYSE:CPQ - news) already has taken several of the actions necessary to regain the company's business momentum, its newly appointed chief executive, Michael Capellas, said on Thursday.
Capellas vowed to have a product rationalization and restructuring strategy ready to announce by Aug. 15.
Speaking to Wall Street analysts and reporters in New York, Capellas said he was ready to confront the issues that ail the world's No. 1 personal computer maker, but denied the company's plight required a turnaround.
Capellas, a veteran computer executive and technology consultant with a background in the energy exploration industry, has been with Compaq for a year, serving first as chief information officer and for the last six weeks as the Houston company's chief operating officer.
During the conference, Capellas confronted head-on the company's ambivalence between selling computers through a network of distributors and retailers, and selling direct to customers, as some of its faster-growing rivals do. He said the company's goal was to do both in near equal measures.
''Today, (our direct PC sales) are at 15 percent. By the end of the year, we will be at 25 percent. On a going-forward model, we want to be at 40 (percent),'' he said.
Taking aim at reports that the company's PC leadership is in danger, he said Compaq had continued to gain market share in the second quarter, despite its warning last month that it expected to record a loss of up to 15 cents per share.
''I believe that ... despite some other evidence to the contrary, you'll see us grow our market share,'' he said of second-quarter PC market statistics. Rivals -- including Dell Computer Corp.(Nasdaq:DELL - news), which has recently surged to become the No. 2 supplier of PCs -- have said they expected continue to gain market share at the expense of Compaq.
Compaq's No. 1 share of the PC market dropped to 13.4 percent from 14.3 percent in the first quarter, while Dell's share rose to 9.2 percent from 7.2 percent, according to PC shipment data compiled by market research firm Dataquest. |
