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

To: rudedog who wrote (70407)	10/27/1999 8:17:00 PM
From: Piotr Koziol	Respond to of 97611

Compaq Bets The Farm On The Internet HOUSTON, TEXAS, U.S.A., 1999 OCT 27 (NB) -- By Steven Bonisteel, Newsbytes. Compaq Computer Corp. [NYSE:CPQ] says it will fortify its business by "redefining Internet access" and producing products it will be labeling "eTronics," but customers and investors will have to wait a while to find out exactly what the company means by that. While discussing Compaq's third-quarter financial results Tuesday, Chief Executive Officer Michael Capellas told analysts and the media that part of the company's plan to "re-ignite" profitable growth included "delivering the architecture that makes the Internet work for our customers, from large businesses to consumers." Capellas said that includes "new forms of clients and wireless mobility and a new class of what we call eTronics - the convergence of computing and consumer entertainment devices." Compaq spokesman Alan Hodel today told Newsbytes that the company has created an eTronics unit under the auspices of Senior Vice- president Mike Larson, who heads the consumer product group that currently manages its line of Presario Internet PCs. But Hodel said Compaq has yet to elaborate publicly on what kinds of devices would come under the eTronics banner "other that what Michael Capellas described (Tuesday)." "The strategy is capitalizing on the key consumer uses of Internet," Hodel said. Although Compaq reported a third-quarter operating loss of $169 million for its Commercial Personal Computing Group - which handles most of its business desktop PCs - both Hodel and Capellas said the company was moving ahead with its Internet focus on firm ground. In addition to seeing a 51-percent increase in profits (to $65 million on $1.5 billion in revenue) in Larson's Consumer Group in the quarter, Capellas said, Compaq's Enterprise Solutions and Services Group is doing well supplying online businesses with server hardware and software. "Our Strength in servers is a competitive advantage when it comes to delivering e-commerce and other Internet solutions," Capellas said. "Compaq is now the undisputed leader in Web servers. We have a 29-percent share of the market, almost twice our nearest competitor." He said the company's enterprise group would continue to push its AlphaServer and NonStop Himalaya high-end machines outfitted with its Tru64 Unix operating system. On the desktop side, Capellas said, "We understand that this segment of out business has changed dramatically and there is even more change on the horizon. "We intend to drive a new generation of a new generation of Internet devices from desktop to palmtop that we'll build around simple form factors, customized functions and wireless mobility." Capellas said products like Compaq's recently launched Aero pen- based palm-sized PCs and the small-keyboard Aero handheld PCs "demonstrated our commitment to innovation." "Two weeks ago in Europe we introduced a Compaq Aero palmtop that connects to a GSM (global system for mobile communications) phone for wireless access to information on the Internet," he said. "And we have other exciting innovations we will announced in the coming weeks and months." "Everything we are doing in every one of our businesses is focused on the Internet," Capellas said. "Everything we will do will have the Internet at its core, or we won't be doing it." Diana Hwang, research manager with International Data Corporation's Smart Handheld Devices program, told Newsbytes that Compaq's forays into the palmtop and H/PC (Pro) form-factor PCs had "some fits and starts." But she said Compaq's high profile on office desktops and its broad product line is an advantage when approaching business users of such mobile devices. "Because they can offer a more 'enterprise' approach," she said, "they bring something different to the tables than competitors like 3Com (developers of the Palm platform)." In totaling its third-quarter results Tuesday, Compaq reported a profit from regular operations of $117 million, or approximately seven cents a share. Total sales were up 4.7 percent to $9.21 billion. Compaq can be found on the Web at: compaq.com Reported by Newsbytes.com, newsbytes.com 16:32 CST