Rude,
I feel like over the weekend I've had a chance to do my homework and review CPQ's earnings report in some detail, or at least now I "think" I would like more detail...
Within the Commercial Personal Computing (and e-commerce) Group we see the biggest problems... $169 loss 3rd qtr as opposed to last year 3rd qtr of $116 mil profit. Granted that the loss in 3rd gtr is less than gtr2 99 ($225 mil) but my question is what all is included in this group (products and services, etc.)and can we learn in any fashion (or guess) which components are responsible for the big losses and then can we examine CPQ's strategy for "managing the landscape" afresh?
I suspect in this group are SMB desktops, laptops, LANs, and workstations... where do you think the problems are? Are they getting killed by DELL in the desktops, laptops, and workstation product lines because of aggressive pricing, even with superb service and warranty deals?
Or again is this big drop still due to channel inventory reduction (selling the channel supply down)?
How will the resuscitated "network computers" (now called "applicances" deal with the threats posed by DELL, GTW et al in the Commercial PC Group? DO you think that these appliance type limited function PC equivalents will satisfy commercial needs and that CPQ has enough of a jump on design and development to establish themselves as a winner in this category?
If they don't can they re-position themselves profitably in this realm? I suppose I'm wondering if they can match the "aggressive pricing" that Capellas used as a one leg of the rationale for the loss and make some profits?
Doug |
