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

To: Windseye who wrote (70666)	10/31/1999 3:05:00 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

And still more from the Zoo. El POSTED: Time Magazine Online by: go_with_throttle_up (52/M/Houston, Texas) 10/31/1999 2:38 pm EST Msg: 108735 of 108738 Time Magazine Online/Print: November 1, 1999 PC FOR CHRISTMAS? Maybe not Laptops may be hard to get this holiday season because of a liquid-crystal-display-panel shortage. Analysts say manufacturers will meet only 86% of demand this year, and you can expect longer wait lists for models with larger screens and higher resolution. The September quake in Taiwan threw off memory-chip production too. Rather than raising prices, some makers may end up giving less bang for your buck. Best advice: buy now or well after Christmas. Lag Time for Laptops - Laptop Delivery Time * Apple iBook G3 6-7 weeks * Dell Inspiron 7500 2-4 weeks * Compaq Presario 1800 2-3 weeks * IBM ThinkPad 390 1-3 weeks Long and Strong: CPQ!

To: Windseye who wrote (70666)	10/31/1999 5:45:00 PM
From: rudedog	Read Replies (2) \| Respond to of 97611

Doug - I listened pretty carefully to the analyst questions on these topics in the CC. What Capellas said was: Commercial desktop profits suffered from the channel reduction ($200M) and a weak performance in the SMB sector - he seemed to indicate that the SMB effort was a complete bust without quite saying that. We know from the IDC and dataquest data that DELL had their strongest gains in that sector. SMB had traditionally been a white box stronghold. So it looks like CPQ targeted that segment and failed, DELL targeted and succeeded. Capellas then said that sales to large accounts were good. Then he said that in the future CPQ would target profitability before share. I read that to mean that they will not do loss leader selling in the SMB space to gain share, but instead will concentrate on the large commercial accounts where they have traditionally done well, continue to do well, and get some benefit for their overall enterprise strength. There are no revenue service products in the desktop space - most of the service is through channel partners, and any other service revenue would show up in the enterprise group. I can not tell from the numbers what impact the SMB initiative had, but if the group had profitability only equivalent to the consumer group (in percentage terms), and had no inventory charges, the overall number for CPQ would have been about $350M better - they would have reported .25 or better instead of .07! So if I were in Capellas' shoes that's what I would do - just stop trying to compete on price in the cutthroat SMB market, instead concentrate on solidifying control of large accounts and stabilize the profit for the group. Then let the overall OPEX reductions drive EPS. I think if they successfully execute on that plan, which seems pretty simple, they will maybe not grow top line revenue at a record pace (probably 12% to 15%) but will get to annualized EPS over $2 - or at least be at that run rate by 2nd half of 2000. My sense is that such a plan is entirely within the capability of the CPQ management team, that seems to be what they are saying, and such a result would justify an easy double in the stock price.