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

To: PCSS who wrote (96020)	3/13/2002 9:33:43 AM
From: Elwood P. Dowd	Respond to of 97611

Sageza Group Analysis of the Deal by: skeptically 03/13/02 09:32 am Msg: 276642 of 276642 newsalert.com rch-&StoryTitle=compaq March 13, 2002 09:10 Will Commoditization Force HP to Retreat to the Past or to Invent the Future? The Sageza Group Analysis of Upcoming HP and Compaq Merger Opportunity MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--March 13, 2002--After Hewlett-Packard announced its intention to merge with rival Compaq Computer, HP heir and board member Walter Hewlett faced a crisis of confidence. Should he stand with the aligned forces of HP's leadership or give council to fears of a future he could not envision? Sageza analysts have interpreted the numerous announcements and market machinations leading up to impending shareholder votes and have found that many, including Walter Hewlett, have misread the potential value of this merger. "Walter Hewlett has implored HP stockholders not to 'trade HP's crown jewel imaging and printing business for Compaq's low-margin commodity computing business,'" states Harry Fenik, President of The Sageza Group, Inc. "In a fundamental misstep, Mr. Hewlett's opining that HP's signature imaging and printing business will be compromised by Compaq's essential focus on PC manufacturing misses or oversimplifies much of the synergy this merger generates." The Sageza Group's recently released paper, Commoditization, Standards and the Enterprise, points out that the emergence of commodity components is driving a fundamental change in the IT marketplace. HP and Compaq, this should not be viewed negatively, but rather as a confirmation of the strategic directions both companies embarked upon several years ago. Sageza believes that a close examination of Compaq's business shows that it matches or leads HP in PDAs, laptops, thin clients, low- and high-end servers, data storage, and mainframe computing, not to mention the PCs Mr. Hewlett is so fixated on. HP, on the other hand, matches or exceeds Compaq in mid- and high-end servers, middleware and management software, networking technology, enterprise services and, of course, printing and imaging. These are areas where the combined company can achieve significant cost savings in R&D, marketing and manufacturing with -- if the deal is executed successfully -- little risk of losing market position. The paper reminds the reader of the important distinction between commodity components and commodity products. Commodity components, such as disk drives, memory chips, and especially CPUs, are defining and delivering architectures that reduce the cost of developing and delivering finished goods without compromising quality. On the other hand, commodity products have little differentiation beyond brand and price because they fill simple, static needs. PCs, clearly trending in this direction, are a concern for any PC vendor with an eye to having a future. Where Mr. Hewlett has gone wrong is in confusing commodity PCs with the industry's migration to commodity components. "The unprecedented commoditization of high-end CPUs being fueled by Intel's 32- and 64-bit architectures is fundamentally changing the market opportunity," states Fenik. ....con't at link.............

To: PCSS who wrote (96020)	3/13/2002 9:58:30 AM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Where's Carly? I still can't understand why Carly would drop off the edge during these final crucial days before the vote. Her conduct is tantamount to a politician's going into hiding a week before the election. Makes no sense to me. El

To: PCSS who wrote (96020)	3/13/2002 10:56:24 AM
From: Elwood P. Dowd	Respond to of 97611

Spread widened significantly on B of A news. Carly still missing in action, MC disappeared weeks ago. El

To: PCSS who wrote (96020)	3/13/2002 11:39:20 AM
From: Elwood P. Dowd	Respond to of 97611

Bank Of America To Vote Against H-P Compaq Merger By: Donna Fuscaldo, Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Bank Of America (NYSE: BAC - news) Capital Management Inc., one of Hewlett-Packard Co .'s (HWP) largest shareholders, said Wednesday it plans to vote against H-P's proposed purchase of Compaq Computer (NYSE: CPQ - news) Corp. (CPQ). Joe Fazzino, a spokesman at the St. Louis money management firm, said that while it holds 53.4 million shares, or 2.75% of H-P, it only has the authority to vote roughly 6 million of that stake. Bank Of America becomes the latest large institution to voice its opposition to the hotly-contested deal. H-P shareholders are scheduled to vote on the merger March 19 . According to Fazzino, the firm is opposed to the merger because the combined company would have an "unfavorable product mix," it would increase it reliance on personal-computers, would face "significant" integration challenges and would likely dilute earnings going forward. (This story was originally published by Dow Jones Newswires)