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Technology Stocks : Compaq
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To: StockMan who wrote (16423)2/3/1998 5:11:00 PM
From: John Biddle  Read Replies (1) of 97611
 
Maybe you're right, but I don't think so. Many manufacturers sell two different lines of similar products with different names, different brand identities and to different customer bases. I think Compaq and DEC could do that too.

While I acknowledge that the channel will know that DEC is owned by Compaq, I don't think they will fight a direct approach by DEC. Selling Compaqs is important to them and they'll think twice about rebelling over DEC. DEC selling via a different avenue doesn't put the kind of pressure on the resellers that selling Compaqs direct would. With the two having different models, different identities, it's unlikely that the store will lose Compaq business, and know definitively that it has, to DEC.

I think that Compaq as the parent of both DEC and Tandem will be able to exert serious leverage over suppliers and get DEC and Tandem great purchasing arrangements, even if they don't change their name.
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