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To: Ann Janssen who wrote (49033)	2/27/1998 4:27:00 PM
From: Joey Smith	Respond to of 186894

All: Article on CPQ/HWP retail PCs Retailers Say Compaq PCs Are In Short Supply (02/27/98; 4:12 p.m. EST) By Roger C. Lanctot, Computer Retail Week Rumors of excess product held in inventory by distributors knocked nearly $2 off the value of a share of Compaq Computer in the past two days, but retailers said they would like some of that inventory. A report on the Reuters newswire late Thursday quoted an analyst at Salomon Smith Barney who speculated that Compaq was seeing an increasing inventory position and had begun "negotiating with the channel" to take on additional inventory. A Merrill Lynch analyst, meanwhile, said its own channel checks indicated strong product sell-through, according to Reuters. Retailers said it has been known for weeks that Compaq cannot make enough Presarios. "Anything they could give me I would gladly take," said one merchandise manager for a national chain who asked not to be named. "Hewlett-Packard PCs are smoking right now and Compaq isn't far behind. We can't get enough of either." Ten retailers contacted by Computer Reseller News confirmed Compaq has been chronically short of Presario PCs for months while the company's retail sales and market share have surpassed all competitors. Some retailers suggested the addition of RadioShack, which Tandy said is supposed to be up and running with Compaq computers by the end of March, has contributed to the shortfall. But other retailers said they have seen no appreciable change in the product shortage since the RadioShack deal was announced. "Since they cut the deal with RadioShack, it's been almost impossible to get product," said one merchandise manager who asked not to be named. Retailers said Compaq is short of systems throughout its desktop line and also has insufficient supply of notebook computers. Most said they expect the problem to go away in about two months when Compaq ships its new line. Retailers said IBM and Packard Bell NEC have sufficient product to supply their existing accounts and are willing to produce more computers as required. For Compaq and Hewlett-Packard, though, there appears to be no additional production capacity available. Neither Compaq nor IBM were available to comment.