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

To: profile_14 who wrote (91081)	5/3/2001 1:35:34 PM
From: tonyt	Respond to of 97611

>Who Wins the Price War? The only one who wins in a price war is the consumer.

To: profile_14 who wrote (91081)	5/3/2001 1:36:01 PM
From: tonyt	Respond to of 97611

Compaq's Capellas: No consumer PC demand recovery NEW YORK, May 3 (Reuters) - Compaq Computer Corp. (NYSE:CPQ) Chairman Michael Capellas on Thursday said he has yet to see signs of a recovery from the soft consumer demand that has crippled personal computer makers. "The consumer business is going to continue to remain weak," Capellas said. "We have not seen that step up." But international markets remain stable, the chief of the world's No. 2 PC maker said in remarks at the Merrill Lynch Hardware Technology Conference here. "We have seen pretty stable international markets," he said. However, "I am starting to get worried about currency volatility," he said. Earlier on Thursday, Capellas told Reuters that Compaq would continue to cut prices in its fight to regain market share lost to top rival Dell Computer Corp. (NASDAQ:DELL) and other PC makers. Dell stole the top spot from Compaq during the first quarter. Copyright 2001, Reuters News Service

To: profile_14 who wrote (91081)	5/3/2001 1:36:49 PM
From: rudedog	Read Replies (3) \| Respond to of 97611

Profile - I don't agree with your analysis - CPQ can play the price war game as long as they want. CPQ gets 5% of its profits from PCs, DELL gets 80% of its profit from PCs. So it costs DELL a lot more to fight the war. While their efficiency probably makes that manageable, CPQ can subsidise a PC price war as long as they want. Now that it has also gone into the low end of the volume server segment, it probably is more like 50% of CPQ's profit against 100% of DELL's - but DELL is not a lot more efficient in the server business than CPQ. Take a look at Message 15750604 on the DELL thread.