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

To: John Koligman who wrote (21790)	3/14/1998 1:50:00 PM
From: WeisbrichA	Read Replies (1) \| Respond to of 97611

JK, A good portion of the "stuff" (DeskPros, ProLiants, ProSignias) are probably in the distributors warehouses (IMD, TechData, Merisel....) and cannot inexpensively be retrieved. Compaq would do best methinks by absorbing the write down from the distributors. That would be same as a discount which could be passed down in that channel. It is possible that the demand in the commercial channel is not as elastic as the demand in the retail channel. Your idea has a lot of merit because these systems are design heavy weights. Which ever the channel you move product to, you still have a total demand that you have to effect in a positive manner. (I.E. move the demand curve out some). Advertising and other promotions have traditionally been used here. So, IMO the answer is they must increase demand to reduce that inventory quickly; moving it to another channel will in effect soak up part of the demand there. RW