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

To: Rosemary who wrote (10057)	12/3/1997 10:58:00 AM
From: hpeace	Read Replies (1) \| Respond to of 97611

News Alert from Dow Jones Online News via Quote.com Topic: Compaq Computer Corp Quote.com News Item #4708749 Headline: Analyst Sees Compaq Using Advanced Micro K6 Chip By January ====================================================================== By Mark Boslet Staff Reporter PALO ALTO, Calif. -(Dow Jones)- One computer industry analyst said Wednesday that Compaq Computer Corp. will begin selling computers in January with the K6 microprocessor made by Advanced Micro Devices Inc. Southcoast Capital analyst Ashok Kumar said Compaq (CPQ) will begin selling desktop machines and notbooks with the K6 chips, which are an alternative to Intel Corp.'s (INTL) Pentium II microprocessors. A deal between Compaq and Advanced Micro (AMD) has been rumored for months. Kumar said Compaq decided not to announce the arrangement for fear of disrupting Christmas sales. However, he said the company has begun shipping K6 machines into the retail channel. Advanced Micro also will supply chips to Legend Holding Ltd., a top Chinese computer maker, according to Kumar and to published reports. An Advanced Micro official declined to comment on both speculated arrangements, and Compaq officials didn't return calls seeking comment. AMD designed its K6 chip with the hope of wrestling market share from industry leader Intel. Its plan has been to outflank Intel by charging less for its high-performance chip, but the company's efforts have suffered as production yields have fallen short of expectations. Nevertheless, the addition of new customers to a roster that already includes International Business Machines Corp. (IBM) and Digital Equipment Corp. (DEC) is welcome news. Still, the question remains whether AMD can use the new business - and produce enough chips - to effectively battle broad-shouldered Intel. AMD has two quarters to establish itself before Intel is able to get its latest-generation Pentium II to a price that will put it in machines selling for $999, Kumar said. AMD's efforts may be "too little, too late," he said. Even so, Compaq is expected to sell a $999 Presario running a 233-megahertz K6 chip and a notebook computer with a 166-megahertz chip, Kumar said. Legend should be able to produce machines in the $599 to $699 range with 166- and 200-megahertz chips, he said.