Consumer PC accounted for 16% of Compaq's revenue according to its 1995 10K. Consumer PC probably accounts for maybe 0% profit by my guess. It is not a good idea to extrapolate Compaq's performance from how the consumer PC segment behaves.
By my guess, Compaq is already taking little or no profit from the consumer PC market. IF Compaq is a low cost producer, THEN for some manufacturers from Japen, or Korea, etc to undercut Compaq's pricing, they would have to price below their cost and that would be dumping and therefore illegal. So what tool, other than pricing, can these deep pocket japanese use to take market share away from Compaq?
By the way, Compaq's 3rd qtr statement said that it had over 3 billion in cash, it must have a pretty deeeeeeeeeep pocket too to hold all that cash. The question is, how is Compaq going to use this money to grow the company? Buying Novell would be disastrous. |
