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

To: Captain Jack who wrote (69859)	10/25/1999 8:20:00 AM
From: rupert1	Read Replies (1) \| Respond to of 97611

Captain: If it is such a powerful marketing tool to be able to say "No. 1 in the US", how come DELL has done so well when it was NO.5, No.4, No.3, No.2? Besides, COMPAQ is still the world's No.1 manufacturer of PC's even with today's market research. Give me the No.4 profits over the No. 1 profits, any day.

To: Captain Jack who wrote (69859)	10/25/1999 10:59:00 AM
From: rudedog	Read Replies (1) \| Respond to of 97611

Jack - I suppose losing mkt share is another plus???? Go back to my posts from October and November of '98. At that time I predicted that CPQ would take a defensive position in the desktop market with the goal of not losing share, which would probably land them as #2 in NA within a year. Why would they do that? 1) allows them to improve margins by concentrating on "systems selling" and value add rather than units at any cost 2) Probably maintains #1 position WW or at least a very strong #2 in PCs 3) Shifts perception of the company upscale, improves overall margin and ASP I also predicted at that time that IBM and HP would be the losers in that space and would continue to drop back in the pack. Amazingly enough, it looks like CPQ actually executed on that plan. BTW the scuttlebutt at that time was that the plan was proposed by Rosen and opposed by EP. I frankly think it is the right way to go and could care less whether CPQ is #1 in PCs as long as they are improving profitability and growing the business. They didn't invest $10B to grow the PC business - their plan for nearly 5 years has been to shift to a full-service IT company while not losing the PC base. I am very comfortable with what is happening. I would actually be much more disturbed if after all of the pain that CPQ went through to set up for a change in their business model, they went backwards and started back down the road to a painful battle for PC share. Perhaps I should go back and compile all of those posts... CPQ appears to have actually developed a 5 year plan and executed on it, despite a complete shakeup of management and all of the other turmoil.