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

To: Dulane U. Ponder who wrote (22158)	3/16/1998 10:46:00 PM
From: rudedog	Read Replies (1) \| Respond to of 97611

Dulane - In sub-1K, you need to specify whether you are talking about CPQ's consumer business or commercial business. Consumer people seem intent on driving price down, with no end in sight, since this drives more first time buyers who then move up to more expensive machines later. This has been a very successful strategy for them - CPQ can't make enough consumer machines and growth in that segment was a Dell- like 97% year over year as reported in a number of publications. Their commercial business is, I think a different story and I believe you have it right - this was a way of moving that older desktop inventory. However, there were already indications that the rapid decline in the consumer space was driving corporate customers to look for lower prices also. CPQ may have created a new price floor for commercial desktops.

To: Dulane U. Ponder who wrote (22158)	3/16/1998 11:21:00 PM
From: Jason W. France	Read Replies (2) \| Respond to of 97611

Dulane, "Has it ever occurred to you that cpq may not want to be in the sub 1k market? That sub 1k is simply a means of clearing inventory on the type of machines they no longer wish to build? This is an entirely off the top-of-my-head notion but it has a certain cache (can't figure out how to compute the accent on the final "e")." First of all CPQ has a totally separate brand for the consumer segment (presario) vs commercial (deskpro). (FYI their current inventory blunder is all deskpro!!) Using sub 1K to clear out old presario's is one strategy, here is another. Adopt Dell's mfg and distribution tecqniques and don;t get into the inventory mess in the first place!!!!!!!! sounds like this strategy would have saved CPQ shareholders about $500MM this qtr. ironically isnt that close to the dollar amount in options that were awarded to Eckhard and his exec staff last year!!! Jason