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Technology Stocks : Hewlett-Packard (HPQ) -- Ignore unavailable to you. Want to Upgrade?

To: MeDroogies who wrote (293)	5/9/2002 6:25:22 PM
From: Dave B	Read Replies (1) \| Respond to of 4345

MeDroogies, If CompUSA or Best Buy or any of them brought in the white box solution, there's no guarantee they'd sell, let alone help the retailer make money. In fact, there's alot of evidence they'd lose money on the bargain. It's great bargaining leverage to have, but let's see them really do it. Actually, it's probably the opposite. The sales people would probably be incentivized to sell the house brand. But they have to have some leverage over HPQ to make sure that HPQ doesn't take advantage of the situation (read, make too much profit). I expect them to bring in another brand, if they don't carry one already (I think MicroCenter pushes e-Machines quite a bit), to make sure that they have something else to offer when HPQ can't deliver or needs some "comeuppance" for some perceived transgression. As for white boxes on the web, sure you can do it, but we're talking about people who are going into stores to buy. In those cases, they usually buy what the salesperson recommends. If the salespeople are incentivized to sell another brand, they'll sell another brand. There's too much competition for commodity PCs. No one is going to let HPQ have any significant leverage. I agree completely with you that we should forego the channel. HP should have done it years ago, and I understand that CPQ is well ahead of them in this area. Dave

To: MeDroogies who wrote (293)	5/9/2002 6:37:04 PM
From: BelowTheCrowd	Read Replies (1) \| Respond to of 4345

Many of the retailers are effectively using PCs as a "loss leader" to bring people into the store, knowing they'll be able to upsell them on everything from Anti-Virus software, to speaker upgrades, to 50-packs of CD-R disks. Just like camera retailers, who are happy to sell you a Nikon at cost, because they know that 95% of the time they'll sell you on an "essential" skylight filter for $20, which they purchase in bulk for pennies. In computers where there's also software in the mix, the opportunities to upsell an otherwise money-losing product are almost infinite. And I would not question for one second that a company like Wal-Mart has the ability to create their own brand if they want to. Their name is strong enough, and they are an increasingly large share of the retail PC market. mg