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Technology Stocks : Compaq

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To: Adam Nash who wrote (24437)4/17/1998 10:02:00 AM
From: rudedog  Read Replies (3) of 97611
 
I have asked several senior CPQ people in the Sales organization, and in the product groups - the response has been very consistent. The consumer machines (presario) all have good margins, including the low priced models. CPQ has no incentive to take a bath on these products since they are selling as many as they can make, demand far exceeds supply and sales are up more than 100% year over year.
In the commercial line, older products being sold at low prices are at much reduced margin, the goal is clear out the inventory in advance of new products. The newer commercial machines in this price band are lower component cost and have good margins, even the very low cost sub-1K machines. CPQ is in this business to make money long term. The idea that CPQ is creating a low-margin product line is nonsense.
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