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

To: Mohan Marette who wrote (12058)	12/24/1997 10:43:00 AM
From: hpeace	Respond to of 97611

Mohan, It would be close to that price or higher if you didn't haggle. It's unfare to count my price which is allot less than that since I've bot to many pcs. Right now cpq isn't under pricing pressure on the pII300. they don't care about lowering the price on a pc that is sold out.. does that make sense.Cpq's goal is make money. Far now I think cpq wants to sell them at higher price til they over come the demand for those pcs.

To: Mohan Marette who wrote (12058)	12/24/1997 10:45:00 AM
From: hpeace	Respond to of 97611

News Alert from BusinessWire via Quote.com Topic: Computers and Electronics Quote.com News Item #4890801 Headline: Dell Uses Aggressive Pricing to Grow in PC Market ====================================================================== IRVING, Texas--(BUSINESS WIRE)--Dec. 23, 1997--Today's market for desktop PCs can be summed up in two words "cut throat". PC manufacturers are continually fighting for position and market share by out-pricing each other and offering more features in new products for significantly less money. The growth of the low-end sub-$1,000 PC market has caused shock waves across the industry and caused many companies to re-evaluate their marketing strategies. According to Michael Autrey, PC Analyst for ARS, "declining AUPs (average unit price) for PCs puts substantial pressures on manufacturer margins, and only those manufacturers that are the most efficient at getting product into the market will realize profits." Perhaps one of the most efficient companies in today's market is Dell Computer, and they have now become a price leader in the competitive direct market. According to ARS Data, Dell has increasingly lowered prices on its consumer line of desktops over the past year to more effectively compete in the consumer market. In the beginning of 1997, Gateway 2000 desktop PC systems were priced on average 12% below comparable Dell systems. Now, Dell is priced more competitively and holds a 5% edge over Gateway. "In the past, Gateway held a $150 to $200 pricing edge over Dell. Because of its strong push into the consumer market and aggressive pricing structure we are now seeing Dell PCs priced consistently below Gateway's." The primary reason that Dell has been able to take the pricing lead is the companies positioning and efficient methods of sales, marketing, and distribution. "Dell is well positioned to compete in this difficult market. Through their manufacturing efficiencies, combined with the margin they preserve by eliminating third party channels, Dell can effectively compete in the price-sensitive consumer market, and will likely continue to make strong profits," says Autrey. Continued pricing pressures from its competition will force Dell to continue to fine-tune its merchandising and distribution strategies as well as its pricing structures. "Companies such as Gateway 2000 still hold a very strong position in the direct market and will continue put more pressure on Dell," adds Autrey. The growth of Dell and other players in the direct channel is being impacted by the explosion in sales for sub-$1,000 PCs in retail. Manufactures such as Compaq, Packard Bell, and HP who offer low-priced sub-$1,000 systems through the retail superstore channel will continue to lure customers away from the "value priced" PCs from Dell and Gateway. "We are now seeing retailers for the first time offering complete new systems that include a monitor, printer, and PC for a price of $999! Six months ago, you could only find these types of prices on open-box, demo, or discontinued products." Prices on new top-of-the-line systems are now facing pressure because of the low-end market, and aggressive strategies taken by Dell. According to Autrey, "we are seeing the aggressive prices trickle down all the way to the high-end market. The newest systems in retail are now having pricing actions taken shortly after introduction." Many of these price reductions are due to continued pressure from the low-end market and the substantial impact that Dell and the direct market has on today's PC market. As a result of the growth in the low-end market, and Dell's quick emergence as a price leader, PC companies have to evaluate where they want to go in 1998. Companies such as Gateway 2000 who have been price leaders in the direct channel will face continue pressure from Dell. Additionally, companies such as Compaq, Packard Bell, and HP will continue to fight for sales with their "value-priced" retail systems. The new year promises to be a strong year for PCs, and companies such as Dell who are ready to fight for customers, willing to cut prices, and have an infrastructure to support shrinking margins, will find profits.