What about today's price action? Anybody have a sense of whether today's buying was retail or institutional driven? There was a lot of press which suggests a spur of retail buying that may or may not be followed up with real money buying.
The news of a Presario Internet PC (the excitement is about buttons on the keyboard?) shouldn't have moved the stock. Do you think retail build to order makes sense? I can't see how they can compete with Dell, when CompUSA has to take its cut. I guess it could be cheaper than the current way of doing business, but it hardly seems like a surefire Dell killer. There seems to be the risk that Compaq could confuse the customer, which would cannibalize existing sales. The scenario I have in mind is that a guy walks into CompUSA and plans on buying a nice juicy Compaq box. Then, he gets miserly and begins to pinch off the high-margin extras.... This wouldn't be good.
On the other hand, build to order could help indifferent customers get loaded up with lots of doodads and gadgets they don't really need and wouldn't have paid extra for. I'm suspicious of this, though. I think the PC market is too competitive for much of the latter.
Now, I would be worried about some of the other PC makers, who aren't as efficient as Dell/Gateway and aren't as marketing savvy and established as Compaq. I guess this would be Hewlett Packard and Acer, and perhaps IBM?
Comments?
Matt |
