I agree with you, the question is can CPQ take on IBM and HWP and do well. That's one reason I bought the stock, however for the next couple of years CPQ is still the PC king, and right now they are getting their butts kicked by Dell. With internet sales booming, I'm not convinced that Dell's model is necessarily a gimmick. Right now, CPQ is mired in a price war with the other giants at the low end, and facing a double whammy with inventory problems. In addition, if Intel steps up the pace of chip introductions, that should in turn result in even faster product obsolescence, which again plays into Dell's model. The only fly in the ointment is if PC prices really collapse at the high end, but even that would not help CPQ, as it would simply result in more competition. Guess we better pray CPQ says the right things about this merger, and that the server market stays strong. It's obvious that right now the market could care less about CPQ's superior high end technology. The market is paying for Dell's proven growth/performance model, hence Dell having a higher market cap than CPQ/DEC, with 1/4 the sales....
John
If I'm missing something, fire away, glad to hear it!! |
