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

To: Elwood P. Dowd who wrote (90522)	3/28/2001 2:13:41 PM
From: John Koligman	Respond to of 97611

It's unfortunate that the economy has thrown a rather large wrench into the works, but CPQ really has to concentrate on the high end. Dell has to run twice as hard just to stay even with the collapse in box prices, so they are caught in their own vicious spiral. Years ago I paid $5000 for an IBM valuepoint PC with a 486 66mhz CPU and 16 meg RAM. You had to upgrade fairly regularly back in the 1990's because software kept appearing that needed the power. These days, you can get a computer with a 1Gig processor for not much over a thousand bucks. It can run pretty much anything out there, and Dell has to sell three of 'em to equal the revenue of one machine just a few short years ago. Regards, John

To: Elwood P. Dowd who wrote (90522)	3/29/2001 6:55:25 AM
From: PCSS	Respond to of 97611

Some info from a GS research alert this morning There have been rumblings in the storage space over the past week about new products, competitive wins, and aggressive pricing. We believe that the competitive issue has been confused with the economic slowing and, as a result, been blown out of proportion to some extent. The economic picture has made Q1 difficult for storage co's, with deal pushouts and aggressive pricing prevalent. While every co. has had to work much harder, HDS, given its small size and new products, has experienced very strong growth. EMC, while faring better than other systems co's, seems too large to escape totally unscathed, with our EPS est. of $0.89 already well below FC consensus of $0.97 for 2001. See the following table for recent growth rates for key storage companies or for the storage portion of larger integrated systems companies and our estimates of growth for the March quarter. Year-to-year growth CPQ EMC* HDS HWP IBM NTAP SUNW September 2000 44% 48% 45% 41% 50% 109% 50% December 2000 52% 50% 75% 20% 15% 91% 28% March 2001 estimate n/a 43% 100% 10% 15% 45% 7% For EMC, this excludes its Aviion business. HDS = Hitachi Data Systems Source: Company data and Goldman Sachs Technology Research estimates. As an aside .... this is the 1st time in 2 years that I've seen GS include CPQ in anything.* Michael