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Technology Stocks : Compaq

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To: Chuzzlewit who wrote (31664)8/27/1998 1:46:00 PM
From: Geoff Nunn  Read Replies (2) of 97611
 
Drew and Chuz,

The Wall Street Journal today ran an ad by Compaq DirectPlus. Inadvertently, it seems to bear out CPQ's lengthy inventory lag which you suggested. The ad features a CPQ Deskpro P-II 266, a business PC priced at $1399. I called CPQ and was told that this PC only comes with W-95. It does provide a $29 upgrade coupon.

Hmmm... Windows 98 was officially launched on June 20th. On or about that date, Dell did a 100% transition to Win 98 on all its desktop systems. Presumably CPQ did as well. The fact that this is a W-95 PC, and has only a P-266 processor, suggests it was manufactured prior to June 20th. That would mean it has been sitting around in someone's inventory for at least 9 weeks.

According to CPQ, if purchased today there would be a wait of 7-10 days to receive the PC. When this figure is added, the time from the date of manufacture to the PC reaching the consumer will have been a minimum of 75 days.

Summary: This PC appears to have been manufactured nearly 11 weeks ago or perhaps even longer. I don't claim this is indicative of CPQ efficiency. Nonetheless, it does seem to support the conclusion that CPQ doesn't have its inventory situation under control.

Geoff
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