SDTI will be part of CPQ's strategy.
Compaq Says 1999 Is Its Internet Year
By Neil Winton, Science and Technology correspondent
LONDON (Reuters) - Compaq Computer Corp. (NYSE:CPQ - news) CEO Eckhard Pfeiffer said Tuesday he
wants 1999 to be the year when the world's largest personal computer maker starts to take on leadership of the
Internet.
''Our top strategic priority is Internet leadership in the industry,'' Pfeiffer, who is also Compaq's president, said at a news conference.
The Houston-based company has a world market share of just under 16 percent, heading International Business Machines Corp.
(NYSE:IBM - news), Dell Computer Corp. (Nasdaq:DELL - news), and Hewlett-Packard.
Companies like IBM and Microsoft Corp. (Nasdaq:MSFT - news), the world's leading software company, have staked claims to lead the
new business of electronic commerce generated over the Internet, where consumers buy cars, books and CDs using their PCs, or
businesses slash costs by automating supply chains.
Isn't it a bit late for Compaq to join this battle?
''We are ahead of everybody else,'' Pfeiffer told Reuters in an interview. ''You may say that's just talk, but let me give you the facts. We
have not been communicating how strong Compaq is in the total Internet structure.''
He said Compaq products were now all fitted with a so-called Internet button -- press the button and you go straight to the Internet.
''We are the leader now and we are focusing all our business strategies on the Internet. So far we have been very noiseless about this,'' he
said.
In his earlier presentation, Pfeiffer said Compaq's business strategy called for revenues to hit $50 billion by 2000.
''Analysts predict revenues of about $43.5 billion for 1999, and however ambitious our predictions have been in the past we have always
achieved them.
''Fifty billion dollars by 2000, we could possibly exceed that. This is very achievable,'' Pfeiffer said.
Compaq has said it plans to float its AltaVista Internet portal site as an initial public offering later this year.
Compaq acquired AltaVista as part of its takeover of Digital Equipment Corp. last year. Pfeiffer told a questioner at the news conference
that Compaq saw much financial leverage in the planned offering because of the high valuation of Internet stocks.
When asked how much the company might be worth, Pfeiffer said: ''Half a billion dollars, a billion dollars, I don't know, they are just
numbers.''
''We pick the timing when we file the application to proceed, and we'll look at the whole Internet market place and stock prices and
valuations and so on. We will try and pick the best timing,'' Pfeiffer told Reuters.
He said he expected demand for personal computers from big corporations to drive sales worldwide in the first half of 1999. ''There are
lots of companies out there that still need to buy our products to become year 2000 compliant,'' Pfeiffer said.
He said first half demand from large companies would decline but be taken up in the second half by smaller businesses, which had left
millennium computer bug compliance efforts to the last minute. The fourth quarter would be boosted by seasonal consumer buying.
Pfeiffer reiterated Compaq's target to increase revenues to $50 billion by 2000. Compaq revenues hit $31.2 billion in 1998, and should
reach $43.5 billion in 1999. |
