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

To: Nicholas who wrote (23491)	3/26/1998 10:58:00 PM
From: rudedog	Respond to of 97611

I think what Compaq is saying is that there will be greater demand in the 2Q runup to WIN98 launch, and that if demand follows the pattern that was seen at the WIN95 launch, CPQ will not be able to meet demand (CPQ had backlogs of more than 16 weeks on some models after the WIN95 launch). Because of the current inventory problem, CPQ has excess capacity today. It would therefore be a smart move given the potential demand curve for CPQ to use that capacity to load up for the future, but given their current problems they are not going to do that unless the channel goes along with the market forecast, since CPQ's primary goal is to reduce the overall inventory position long term. Availability is CPQ-speak for lead time from order, lighter availability means less product will be available from the factory on short term orders. The upgrade issue is that desktop machines are shipped with the OS installed, currently WIN95. Once WIN98 is out, users will want it but dealers will have WIN95 in stock. Last time it was WIN3.1 or WIN3.11 in stock, and CPQ offered a coupon for a free upgrade in every system sold for about 90 days prior to the launch. This time it looks like it will be a coupon which just offers a discount on WIN98, not a free upgrade. What the dealers are howling about is that CPQ pretty much sets the standard, but others may not be able to match CPQ's upgrade price. But since CPQ will define the value to the end user, others will just have to eat the cost difference.

To: Nicholas who wrote (23491)	3/28/1998 4:02:00 PM
From: Nicholas	Read Replies (2) \| Respond to of 97611

Does anyone follow insider trading on the thread? It appears that 1.5 million shares have been sold by executives since January. And if you compare that to 1997, the amount seems high. Could this be an ominous sign? InsiderTrader. Monthly Insider History - Compaq insidertrader.com Insider Codes: insidertrader.com Form 144 Definition insidertrader.com