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Technology Stocks : Compaq
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To: CENTrader who wrote (17436)2/15/1998 1:33:00 PM
From: Dan Packer  Read Replies (1) of 97611
 
I'm struck by two of Dell's comments:

1.<<this combination puts Compaq on the wrong side of history.>> Maybe I don't know history, but it seems to me that in a consolidating industry, CPQ may be on the right side of history. The historic concern I would have is that it is a lot easier to manage a business than to manage people - huge mergers like this often fail.

2.<<Dell sells direct to customers; Compaq sells predominantly through resellers. As a result, Dell has lower prices and less inventory. "Customers ask, 'Why should we pay a markup of 7% or 8%?>>

I've always thought of Dell and Gateway as being the marketing arms of Intel. If this argument is correct, at what point do customers badger Intel to cut out the friction of a marketing arm totally?

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