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

To: Jorge who wrote (9835)	11/29/1997 1:48:00 PM
From: hpeace	Read Replies (2) \| Respond to of 97611

don't know when..I think the 3rd week of January.

To: Jorge who wrote (9835)	11/30/1997 3:04:00 AM
From: hpeace	Respond to of 97611

PC Buyer's Market -- Bargain-hunting for finished systems likely as resellers try to cut inventory InformationWeek, Friday, November 28, 1997 at 22:53 by Craig Zarley, Computer Reseller News With resellers hurrying to accommodate custom-build PC assembly programs, corporate customers may find themselves with a buyer's market for finished systems that resellers have in stock. As Compaq Computer, Hewlett-Packard, and IBM all move to a supply-chain model that calls for resellers to have only two weeks of inventory and for building PCs upon receipt of order, the resellers are faced with large volumes of inventory left over from the old build-to-forecast model. The surplus could promote a buyer's market as vendors and their channel partners more aggressively price their systems to compete against direct vendors such as Dell Computer. Contributing to this overstock, Compaq and, to a much lesser degree, IBM offered resellers rebates at the end of the third quarter if they acquired some of the excess inventory. Some channel executives say this tactic only postpones the day of reckoning and exposes either the channel or the vendors to a big price-protection hit. "Buy-ins are still part of the game," says Jeffrey McKeever, chairman and CEO of reseller MicroAge Inc. in Tempe, Ariz. "About a month's worth of inventory needs to disappear." Executives in the PC distribution channel say that in aggregate, about 30 days worth of inventory needs to be sold or written off before the transition to custom build-to-order programs can take off. But McKeever and others say the disappearing act could be painful:While vendor incentives are too rich for distributors to pass up, they expose the channel to a lot of risk, McKeever says. Because the buy-in rebate levels are based on hitting sales goals, aggressive price and turf wars are taking place among distributors. "HP is the only one that hasn't stuffed the channel, and that makes it difficult to get to 15 days of inventory," says Bob McInerney, president of distributor Merisel Inc. in El Segundo, Calif. "If everybody would just say no [to buy-ins], that would be fine, but a lot of people don't." Some distributors feel that the transition to channel assembly and build-to-order could take more than a year. In the interim, distributors and vendors who move too quickly to the supply-chain model run a risk. "Anyone who tries to transition too quickly will leave market share on the table," explains David Dukes, vice chairman of distributor Ingram Micro Inc. in Santa Ana, Calif. HP says it has decided to end the buy-in programs as part of its revamped supply-chain plans. "That [the buy-in program] will backfire one day," says Jacques Clay, a VP at HP and general manager of the extended desktop business unit. "Inventory is the ugliest thing in the world. It hides process problems. When you have to put money on the table, that's clearly bad for the channel." IBM is pursuing a strategy of transitioning from build-to-forecast to channel assembly on a model-by-model basis beginning with its desktop line. "You can't do buy-ins while you're doing channel assembly," says Bill McCracken, general manager of sales and service for IBM's personal systems group. He says IBM would close the second quarter of 1998 with new terms and conditions for its entire desktop line, including two weeks of price protection. Still, channel executives say vendors should accelerate the process, write off any excess inventory, and get on with building solutions based on customer orders. "HP was the only one not to do them (buy-ins), and guess whose market share is growing fastest?" says Ed Anderson, president and CEO of reseller CompuCom Systems Inc. in Dallas. "HP is outgrowing Dell."