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

To: tonyt who wrote (20293)	3/7/1998 12:12:00 PM
From: Windseye	Respond to of 97611

Barron's article seems very thorough... My surmise based on reading everything to date is that CPQs zero PC strategy was very successful last year...the support of Cyrix and AND Pentium & Pentium Pro clones has been so good that INTC has a surplus they need to get rid of. INTC announces Celeron because they NEED to compete directly with the sub zero PC CPU clones. Rather, they CANNOT drop the prices on the P and P Pro CPUs without destroying their pricing structure BUT they do need to slow down the competition so they can continue their migration to P II. So... who gets caught in the middle of their success? CPQ... INTC pressures CPQ to take more Pentiums and the PROs, CPQ stresses end year sell-ins (what a euphemism!), the channel squeaks and says "no more"! The channel leaks info that the channel is stuffed in an effort to put pressure on CPQ to stop pressuring sales of Pentiums and Pentium PROs, exactly what CPQ needs to get rid of. Well, that's Saturday morning's attempt to reconcile the "data", such as it is, any comments? Does it mean that other companies will have to respond similarly? HP reacted with price cuts putting pressure on CPQ in Jan/Feb as well, so Pfiefer says it is ver aggressive out there... he's feeling it from all sides. But does this mean that all the rest of the box makers will have lower sales now? CRN says that CPQ has many more units than anyone else and DELL's sales model precludes excess CPU stock, so chances are CPQ feels the most pressure now.