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

To: gc who wrote (20448)	3/7/1998 8:14:00 PM
From: ed	Respond to of 97611

Pls do not be too emotional. I think they mentioned that CPQ will be a 50 B company by 2000 at the end of 1997, and the DELL announcement was made in Jan of 98.PF also said CPQ found the Channel problem in second half of 1997 in his latest interview. So this Channel stuffing and that CPQ will be a 50 B company by year 2000 are just two different things. The recent problem for CPQ is just some inventory problem. Thinking about a company selling close to 15 MM units of PC per year, those inventory issue is very common, and 0.2MM is just 1.33% of its annual sales and can be digested quick. CPQ need to be very careful about its inventory issue in the future, especially those high teh products which obslete quick. Based on INTEL's recently announcement, with big inventory of CPUs, more than 0.2MM units, I guess other box makers had inventory issue at this moment. It is no surprise box makers just build up more inventory to fulfill the suddern surge in seasonal sales at the end of the year. This inventory story happened every year. For DELL's BTO model, it is a good one. You maintain the min inventory level, and keep the products flow continuously in the channel. You do not build untill you got the order, and you never lose money. However , the system and efficiency of manufacturing must be very high. This is what the Japanese called in time delivery system. You build the min inventory.