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

To: rupert1 who wrote (70413)	10/27/1999 8:59:00 PM
From: rudedog	Respond to of 97611

I think Kumar wants to be a contrarian - it's better press, and there is a little bit of spin going on, especially by Gerstner. I expect Kumar to get to the "conspiracy theory" that IBM, HP and CPQ are working industry perception to make the PC business seem unattractive, since their business models support that notion and DELL, GTW et. al. are dependent on the perception that PCs are booming and the place to be. Unfortunately for Kumar, I think that the IBM / HP / CPQ spin is correct, and have in fact thought that for 5 years. The trends seem completely obvious to me and to many in the business. So there does not need to be a conspiracy, just smart guys seeing the same thing and adjusting their businesses accordingly. Meanwhile DELL seems pedal to the metal driving more into the PC space. I commented on this in some depth on the DELL thread and although I took some heat, many of the more sensible posters understood and to some extent agreed with me. DELL may be able to succeed on that track, although not with anything like their current growth rate. In revenue terms their growth has already started to slow, and I expect them to be in the 30s soon, stabilizing in the 20s (assuming industry growth stays in the teens). Maybe they can make that work but it means the stock price will not see the performance of past years. I agree that services needs to be a focus area for CPQ and I will be watching that closely. But getting a tight, unified product strategy and a profitable business model, with no other changes, would justify a double on CPQ's current stock price.