Well, if you look at the big picture, you will know what is going on.
In the past two years, when DELL make money, CPQ, IBM, HWP all make money, they are always in parallel. But since the 1q of 1998, the "parallel" was broken.
DELL make recore earning , and IBM, HWP still made reasonable profit , while CPQ
break even , but with the leading position of unit shipment.At the same time we heard that INTEL got big hit, CPQ reduce its order of CPU from INTEL This indicated to me the followings
1) the PC market is still very strong
2) CPQ started to clear its old inventory which were built with components of high cost.We see CPQ reduce the order of CPU from INTEL while still ship record number of units to the market. So, the question is if CPQ did not order additional
CPUs, then where those boxes shipped comming from ? My answer is from the inventory, which is to say that CPQ is cutting its old inventory fiercely in the past
one or two quarters. The second question is if CPQ shipped record number of units, why it only end up with balance while in the same period DELL, IBM, HWP still
made reaonable profit ? The answer is CPQ was selling the units from the old inventory which was built with components of high cost, and at the same time
CPQ had given high discount to clear those old inventory, that is why CPQ ended with balance with record number of shippment in units, while in the same period, its competitors still made reasonable profit.
My conclusion: This time , CPQ is very seriously clearing its inventory, and the BTO model is on its way, and the effect will be seen in the next couple of quarters.
|
