I have some general comments about CPQ and am looking at the stock. All flames are welcome :)
1) Maybe it's too obvious, so that people do not talk about it, just in case: Compaq is suffering from a change in sale strategy, IMO, the same applies to Intel (INTC). Because of the success of direct sale model (DELL is an excellent example), Compaq is moving towards that direction in order to reduce inventory problems and reduce cost. Why Intel is suffering slowing down in orders? Obvious: new orders are coming in on smaller but frequent orders rather than big chunks it used to be. The change of ordering style is what's causing confusion in Intel forecasting, I believe. If this is the case, depends on how fast Compaq finish "re-structuring", we could see couple of bad Qs.
2) I didn't follow this one closely, thus having a hard time understanding why CPQ bought DEC. For the server market? For alternative chip design to get leverage with Intel? (on top of AMD or whoever's chip?) This sorta reminds me of SGI bought Cray, look what happened to SGI (disclaimer: not sure how close this analogy is but what the heck...) Anyway, if there's any similarity, CPQ might suffer or stay flat for a while, which could mean (in worst case), losing leader position in PC sales.
I don't have any positions in CPQ. I'd like to see POSSIBLE negatives ahead before I get in (long). All comments welcome.
Thank you for your attention.
Will |
