Yaacov - Some ways that we could benefit. HP and CPQ dominate the consumer PC space - there is almost no one else in the game (except e-machines on the low end).
The cost reductions in this space would either allow the companies to make more profit, or to lower end user costs, which makes it even more difficult for players like DELL to enter that market. Or some of both. In any case, good for the top and bottom line, good for market share, and likely good for stock price.
In commercial PCs, this puts the supply chain more on a par with DELL. For CPQ, when combined with the sell-side economies of the inacom distribution capability, this represents the difference between losing $19M (as CPQ's commercial PC group did last quarter) and making $200M... again, likely to catch the attention of investors and analysts in a positive way.
I'm not sure how this translates in costs for big servers, but the "volume" servers should see benefits similar to commercial PCs - they are, after all, developed and delivered through a very similar mechanism.
I am surprised that IBM did not also join in this - the last 3 "Industry partner" deals involved CPQ, HP and IBM, and IBM would seem like they need the cost savings even more than CPQ and HP. |
