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

To: Kai-Uwe who wrote (9981)	12/2/1997 8:15:00 AM
From: Rosemary	Respond to of 97611

Kai, I guess I am in the camp of having enough inventory ready for this season is the way to go. This is a good report. Of course, I have to take umbrage with their remarks about Dell.

To: Kai-Uwe who wrote (9981)	12/2/1997 11:14:00 AM
From: jim kelley	Read Replies (1) \| Respond to of 97611

Kai-Uwe, CPQ's performance this quarter will be more interesting than last quarter when they converted inventory in the channel into sales by cutting the price protection to a few weeks. Basically, they converted liabilities into sales with that move. Also, with the intensifying competition at the low end of the PC market the market shares are likely to come out differently in terms of units sold. CPQ will be hurt in the low end PC market compared to last quarter. DELL sales were somewhat lower ( 13%) than I expected due to a number of factors not the least of which were product transitions in every one of their product categories. . These transitions incorporated the P-II and Tilamook as well as the AGP and the new INTC chipsets. These all required new motherboards, etc. The laptop sales were not as high last quarter as I would expected. All these transitions have been completed now and DELL should turn in even better results. It is clear that HWP is trying to buy marketshare. I personally think that this is a wrong tactic because there is little brand loyalty and they can not hold onto to what they win in the way of marketshare. But it will as you noted lead to disappointing profit results again. In summary, I think that this quarter will be a more interesting indicator of the status of BTO than last quarter for the industry. Regards, Jim Kelley