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

To: Analog Kid who wrote (9216)	11/20/1997 12:57:00 AM
From: Kai-Uwe	Read Replies (1) \| Respond to of 97611

There will always be more price cuts as material costs are reduced further. CPQ cannot hold onto growing margins forever, and market share will only continue to grow with continuing price drops and product enhancements. Price cuts are not negative. Steve always states that they are already factored in before they occur. I could nto find any other words to describe exactly that - the price cuts are rationalised from a financial calculation perspective long before they actually reach the market. As the market leader CPQ is exerting pressure on the competition, so to stay on top. If CPQ is the one to trigger the price reduction, and not the one merely to follow suit, then they are okay, however, if companies are forced to drop prices as sales are slagging (not the case for CPQ currently), then the company is definitely in trouble. Hope that makes sense. For a 'living proof' example check out the impact of the price reductions for Servers CPQ just announced and how that (will) affect(ed) the other players on the market. Kai