SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Compaq
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Senator949 who wrote (40187)12/16/1998 10:58:00 AM
From: rudedog  Read Replies (1) of 97611
 
Robin -
what effect will that have on margins
IMO this reinforces that CPQ is not worried about making the 4Q numbers and wants to keep the pressure up on the direct sales effort. This reinforces what I have been hearing about high end sales, which is that they are ahead of plan - this gives CPQ more room overall on margin since the high end lines are much higher margin - the Tandem products approach 70% margin. The direct business has at least an 8-9% margin advantage over the channel distribution so if the direct portion of the business is taking off that also gives CPQ more room to move the price points.

This also follows through on CPQ's commitment to keep the prosignia line competitive on price, which was one of the big points in the product announcement. If the products are selling out before they even hit the docks, this reduces inventory costs as well. With all of the internal emphasis on hitting 4Q numbers that I had been hearing about, there is no way they would be doing this if they did not have the room to move.

Sounds to me like 4Q is going to be a barn burner, at least for CPQ and Dell - apparently both companies are having trouble making enough product to meet demand. I like the pricing move - it shows confidence and a follow-through on commitment.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News