Sig, that's an interesting analysis, but maybe we can really blame the whole thing on Dell. Look at it this way, Dell achieved good y/y results. Maybe not as good as we'd liked, but nevertheless good. Our friends from the MB thread notwithstanding, it is clear that Dell continues to take market share away from the competition, and does so profitably. So how is this Dell's fault? It is the pressure from Dell that lead to Compaq's stuffed channel because sell-through wasn't robust enough to clear the channel. Similarly, HWP experiences poor top-line numbers along with IBM. [But either of those companies would die to have Dell's top line growth!] Why? Pressure from Dell.
So I think that what's happening is a replay of last year, except we have the added pressure of a Pentium III rollout. I also suspect that Compaq's channel stuffing is greater than even Jim Kelley thinks it is, so I look for really horrible 1Q results from CPQ. I'm guessing that sales will drop at least 20% from the previous quarter, but it could be as high as 25%. I don't time, but shares could come under continuing pressure until Dell reports in May.
TTFN,
CTC |
