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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (64966)	7/12/1999 3:39:00 PM
From: Captain Jack	Respond to of 97611

NW--- part of a news article indicating DELL is kicking ass or trying to while CPQ is down... or Kumar wants the world to know he hates cpq and loves dell... "constant price cutting is a fact of life for PC makers. The main question is whether prices for components--all the pieces that make up a computer--drop as fast or faster than PC prices, and if not, whether a company has a way to supplement revenues lost. In the corporate market, PC makers have had to offset declines in PC prices by selling more expensive servers and/or services such as technical support. Some recent research reports suggest that Compaq is having a hard time maintaining profits in the server market--it's selling more servers but making less off each sale. Compaq said it is able to implement the price cuts due to increased efficiencies in inventory management. The company still may not be enough to keep up with Dell Computer, however. Dell hasn't been immune to the price drops either. But Dell is making up for it by pricing aggressively enough to win customers over from Compaq, according to a research report issued today by US Bancorp Piper Jaffray analyst Ashok Kumar. "Dell's aggressive price cuts on desktops puts them below Compaq's for the first time in a year. However, in Dell's favor, we also have seen a re-acceleration in component cost declines" in areas such as processors, memory, and hard disk drive prices Kumar said in his report. Kumar sees Dell's growth rate of around 35 percent year-on-year for the current quarter to come mostly at Compaq's expense.