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

To: ed who wrote (20623)	3/8/1998 2:05:00 AM
From: kahunabear	Read Replies (1) \| Respond to of 97611

I agree with your shifting of the burden big time. It has always been a mystery to me what the ERP people are talking about. When I listen to them, they make it sound like nobody has to carry inventory and finished goods just pop into existence when needed. Its all a crock. It takes time to build things from raw material. There is no way to anticipate the needs of the market without inventory somewhere. It is a double edged sword though. Sometimes its nice to have inventory when nobody else has it. I disagree that it is simple to cut back inventory. It is costly, and if demand has subsided, which it sounds to me like it may have, there are lots of fixed costs built in. WS

To: ed who wrote (20623)	3/8/1998 5:52:00 AM
From: Reseller	Respond to of 97611

Hi ed, Would like to explore the possibility that the excess inventory in the channel is a result of CPQ cannibalizing their own sales by lowering prices for the retail boxes. IMO lowering prices for their K6 models caused Intel to counter with the announcement of the new sup $1000 P II chip to be shipping soon, alerting perspective buyers that better systems are forth coming at lower prices. I think everyone loses in a price war. Shades of yesterday when the hard drive makers started lowering their prices to gain market share and we all know what happened there. They can't stand to see Dell eat their lunch in the enterprise market, IMO they therefore will be making drastic changes in their business plan going to a major BTO program. They are going to competing with their OEM partners and alienation will occur with the loss of at least some ( IMO a lot ) of the OEMs and resellers. One thing that should be noted is that the largest wholesaler of Compaq equipment in the world ( Ingram ) has been ramping up their own White Box program in what I feel is preparation for the loss of Compaq sales. In fact they are currently selling these in direct competition with CPQ. A short story about CPQ. A few years ago I was offered the rights to sell CPQ's equipment, I only had to sign on the bottom line. The fine print stated that I was required to use only CPQ's parts in their systems, even though I could find the same make of drives elsewhere I couldn't use them because they didn't have a CPQ label on them. Well their drives cost three times as much and due to that I elect not to resell their products. This will all change ( if it hasn't already this was a few years back ) with the new business plan. The days of margins three times what the street makes are over. IMO they will have to change their culture. I kind of look for CPQ to make another run at GTW or MUEI in the near future. Maybe they can be a little more friendlier about it next time. Good luck to the longs Regards Reseller