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

To: Dave B who wrote (1783)	9/25/2002 1:09:03 PM
From: Dave B	Respond to of 4345

Hewlett-Packard to Cut 1,800 More Jobs Boston, Sep 25, 2002 (MidnightTrader via COMTEX) -- Hewlett-Packard (HPQ) is planning on cutting 1,800 more jobs by October 2003, according to reports. These cuts are on top of the original 15,000 job cuts the company planned at the close of its $18.9 billion buy of Compaq. The stock is adding just more than 1 percent on 2,200 REDIBook shares. Price: 12.42, Change: +0.13, Percent Change: +1.06% URL: midnight-trader.com Copyright (C) 2002 MidnightTrader.com. All rights reserved. Unauthorized reproduction is strictly prohibited.

To: Dave B who wrote (1783)	9/25/2002 1:25:23 PM
From: Kirk ©	Read Replies (2) \| Respond to of 4345

Chuckle Dell lacks R&D which I believe they will one day have to merge with IBM to get. Now they are selling printers and ink and sharing the spoils with LexMark. Perhaps they buy Lexmark? Then they go full circle and merge Dell with IBM and we have Lexmark back with IBM and now competing directly with HPQ which is currently well ahead of the game selling printers and ink for a nice profit. In the mean time, HPQ is forging ahead with digital cameras. Hmmm....

To: Dave B who wrote (1783)	9/25/2002 1:34:14 PM
From: Oeconomicus	Read Replies (2) \| Respond to of 4345

Re Dell printers, I think the worries over Dell "getting into" the printer biz are rather misplaced. First of all, for Dell to compete in printers on the basis of price, either they or Lexmark will have to give up a big chunk of the margins on printers - and aren't the big margins in ink and toner, anyway? Second, unlike PCs, servers and other more-complex categories, Dell is not buying cheap components overseas and assembling them here to fill customized orders. They are buying a finished product and reselling it with a markup. No value-add except distribution. Third, based on how Dell sells other non-customized or non-"build-to-order" products like monitors, price is not the driving factor - their prices are much higher than what one would pay for comparable products at online competitors and probably as high as at brick & mortar retailers. They sell them because many buyers want a Dell brand monitor, preferably in black, to match their Dell PC. Fourth, if the goal is the razor-blade model, they have a problem because Lexmark will have to supply those as well. They won't get the margins on the blades to make the model pay. Fifth, they probably won't sell a whole lot of the blades anyway. Ink and toner is, for business customers, likely purchased as part of routine office supply purchases. Office Depot or other OS shops will get the final sale and the manufacturer of the things will make money either way. For consumers, I'd bet most either buy a spare when they buy paper for their printer, or run out to Office Depot when they realize there's no yellow ink and their Christmas cards or photos look funny. Besides, Dell has tried getting into the office supply business and failed. No, I would not worry about Dell "getting into" the printer biz. JMO, Bob

To: Dave B who wrote (1783)	9/25/2002 1:40:30 PM
From: PCSS	Read Replies (2) \| Respond to of 4345

G-S's take on the DELL/Lexmark Printer Deal on HPQ: The long-anticipated proverbial 'other shoe' dropped yesterday as Dell Computer and Lexmark International announced a two-phased deal, marking the beginning of Dell's move into the printer market. While Dell's long- anticipated entry into printers has been a point of concern for Hewlett- Packard investors - given HP's increasing reliance on its Imaging and Printing Group - we think this announcement, although clearly a plus for Lexmark and an extension of a market opportunity for Dell, puts to rest some of the more extreme concerns about Dell's potential impact on Hewlett- Packard, at least for the near- and intermediate-term. At this juncture, we see Dell's ability to meaningfully disrupt HP's printer business more as a possibility to be monitored over time. Our thoughts are as follows: WE DO NOT SEE DELL MATERIALLY ALTERING THE DYNAMICS OF THE PRINTER MARKET AT THIS POINT. Under the agreement, Dell becomes an OEM for Lexmark printers, with the two companies expected to roll out a series of low-end laser and inkjet printers, unique to Dell, beginning in early 2003. This should alleviate some near-term investor fears that Dell would make its entry into printers by licensing or acquiring printer IP and having some degree of control over component procurement and printer manufacturing, which would have given Dell even greater pricing flexibility on printers and supplies. AT THE SAME TIME, WE WOULD NOT UNDERESTIMATE DELL'S ABILITY TO AFFECT CHANGE LONGER-TERM. On the surface, Dell does not appear to be in a position to make meaningful and immediate changes to the printer market. However, viewed as a long-term initiative for Dell, its potential to affect the market could build. As such, the more important element to monitor is Dell's effectiveness in building up its printer business over time. Today, HP accounts for about 37% of inkjet printer sales and 51% of the market for laser printers. Given Dell's traditional focus on gaining share, HP's leadership position in the printer market provides Dell with an attractive long-term target. We believe that this could become a win for Dell if the company is able to grow a fairly sizeable installed base, increase its PC/printer attach rate, pull in printer-only sales, and change the buying behavior for consumables. While there are few details at this time, we have taken a first cut at the potential impact of a higher PC/printer attach rate for Dell printer unit sales (Exhibit 1) and the potential consumables gross margins for Dell. To estimate the profitability of consumables we used HP's laser printer supplies, which HP OEMs from Canon, as a guide, with our assumption being that Dell's margins will be similar although slightly lower. We think that Dell could achieve gross margins in the low to mid 20's, which is accretive to Dell's current gross margins, 17.9% in the July quarter. Dell Printer Forecast Based on an Increasing PC/Printer Attach Rate ............................2001..........2002.........2003 Consumer/SOHO ..Attach rate.......41.0%.........44.0%........50.0% ..Inkjet units......1.78M.........3.03M........4.30M ..Market share.......2.9%..........4.9%.........6.6% Commercial ..Attach rate.......2.5%..........3.0%.........5.0% ..Laser jet units...320M..........422M.........810M ..Market share......0.4%..........0.5%.........1.0% THE HP-DIRECTED ASPECT TO THE DEAL SEEMS LONGER TERM WITH THE SHORTER-TERM GOAL MORE FOCUSED ON DRIVING NEW REVENUE/PROFIT STREAMS. Reducing the profitability of HP's lucrative imaging and printing unit may prove to be a long-term byproduct of Dell's deepening involvement in the printer market. However, in the near and intermediate term, it appears that Dell will concentrate more on leveraging its natural strengths, particularly on the distribution and customer-touch side. THE GROWING AVAILABILITY OF LOW-END COLOR LASER PRINTERS COULD PRESENT AN OPENING FOR DELL. Dell's ability to effectively sell into the SMB market, which could be very receptive to inexpensive color laser printers, could position the company to take advantage of the shift from black and white to color printers. This would allow Dell to improve its printer mix, currently 85% inkjet, and capture the slightly higher margins associated with color laser printers.