Compaq Message Board - Msg: 2615194

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Technology Stocks : Compaq

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To: P.T.Burnem who wrote (8386)	11/1/1997 9:54:00 PM
From: hpeace	Read Replies (3) of 97611

PTB, please look at history and prove that price drops hurt cpq. I think you are out of touch with cost if you think that the 995 pc will hurt cpq. they sold record amts of those 3q97. that pc has been here for months, you didn't know that.????did you and look at cpq margins ..up to 27.4 cpq and even dell will ship and kill. the other pc mfg'ers will ship and die. this post is 5 months old exchange2000.com cpq has now released a sub 1000 mmx pc. The dealer makes 10-14% on the sub 1000 pc and cpq maybe makes the same. Prices are going to drop like a rock and cpq still makes money and market share. CTX dropped one of their premier pcs from 1399 to 899. Thats a drop. the other pc mfg'ers have inventory backing up and have to drop prices to compete with cpq. Compusa and micro channel are coming out with a $500 pc but dealers have trouble selling their pc.s Cpq has price drops planned into 4q if they are needed but they have already written off the drops in 3q profit. Pfief finaly came out friday after close and said that the asian situation isn't effecting them on sales or getting parts. Did you miss that announcement.????? I'll save you the trouble looking it up. price drops have inverse correlation to cpq profit. that mean that the vendors or processes have dropped the cost of prodcution maybe months earlier and they have been getting extra profit, and then the price drop has already been paid for. Cpq said in 3q that their retail sales increased 111% and profit still increased. price wars always help cpq and kill most the others. the last yr prices have dropped through the floor and cpq is making big money. Did you know that even the p166 business deskpro is only $1000. price wars are great for cpq...it kills the supply and then cpq moves into the void and ends up with more market share.

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