Compaq Message Board - Msg: 5203333

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Technology Stocks : Compaq

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To: Eddie Kim who wrote (29181)	7/15/1998 1:35:00 PM
From: rudedog	Read Replies (1) of 97611

Eddie - This works exactly to the consumer model. Drive profitable volume at the low end to develop favorable manufacturing and component costs and drive share. This helps drive favorable pricing across all of CPQ's products. My understanding is that the margins overall for consumers are closer to 20% but I really do not have hard numbers, just scuttlebut. The $899 machines benefit the most from volume discounts and efficiencies of manufacturing. The higher priced machines should benefit from those trends eventually, but Consumers intends to keep driving price points down, build share, build volume.

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