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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Fred Fahmy who wrote (53921)	4/19/1998 10:48:00 PM
From: VICTORIA GATE, MD	Read Replies (1) \| Respond to of 186894

Fred Fahmy re<<INTEL to stop its trouble of the sub1000 > Compaq officials said Pentium MMX desktops are the sweet spot of the market, and Pentium II systems will not move in large volumes until the fourth quarter. At the same time, they acknowledged Pentium II sales grew faster than they expected in February and March. Computer Reseller News Compaq's inventory woes, which have plagued some corporate resellers during the past few months, are now spreading to the small- and midsized-company business market, according to data from the March CRN/Answers Research reseller hardware poll. For the first time since CRN began surveying in late 1994, more resellers reported excess supplies of Compaq (company profile) desktops than reported shortages. Twenty-one percent of resellers said they have too much inventory compared with 10 percent in February, 7 percent in January, and only 1 percent in December. A total of 179 resellers responded to the March survey. Compaq, based in Houston, was still named by 10 percent of the resellers as the manufacturer of its best-selling system, though this is down considerably from 17 percent in February, 16 percent in January, and 17 percent in December. While last month's figure may be only a one-month blip in the data, any decline in the percentage of resellers citing Compaq systems as their best-selling products does not bode well for the vendor as it works to clear out some of its desktop inventory. Other major vendors, including the IBM Personal Systems Group, in Somers, N.Y., and Hewlett-Packard Co., in Palo Alto, Calif., do not show this sharp run up in the percentage of resellers reporting excess desktop supplies. A second round of price cuts this week of up to 25 percent on select Deskpro 2000, 4000, and 6000 models is one sign Compaq is still grappling with a significant inventory backlog, according to resellers. The cuts came after Compaq cut prices in March by up to 11 percent and offered free V50 monitors on select Deskpro models Tony Audus, director of purchasing at Ann Arbor, Mich.-based Technology Partners, said there has been little response to Compaq's promotion. "We're seeing really no change in the number of Compaq Deskpros sold," he said. Audus said his company just canceled some orders placed with Compaq. Brian Ridge, manager of desktop marketing for Compaq, said sell-through of Deskpros was the highest in Compaq's history in the first quarter. "In the first quarter, we sold more Deskpros in North America than the entire population of the state of Vermont," he said. Compaq officials said Pentium MMX desktops are the sweet spot of the market, and Pentium II systems will not move in large volumes until the fourth quarter. At the same time, they acknowledged Pentium II sales grew faster than they expected in February and March. One Washington reseller, who did not want to be identified, said it was ironic that some of the very systems on which Compaq has taken additional pricing action last month appear to be on backorder. The reseller said he was unable to supply an order of 40 units of a Compaq Deskpro 2000 with free monitors. "Now they are backordered," the reseller said. "I'm not sure why [Compaq is] taking another pricing action. It wouldn't make sense to drop prices on something they can't keep in stock." Compaq officials did not address the reason resellers may be unable to get some promotional products. Whether Compaq is moving enough inventory or not, the aggressive promotions are taking a toll on profit margins. Compaq's promotional activity, including a 4.9 percent desktop financing offering, may have cut into margins in the most recent quarter. Compaq posted profit margins of 18 percent for the quarter compared with 27.6 percent for the previous quarter. Sun Microsystems, by contrast, had gross margins of 53.3 percent for the quarter ended March 28. Compaq CFO Earl Mason said during a first quarter earnings teleconference with financial analysts that Compaq's unit sales were strong. "For total Compaq, there was a dramatic difference in revenue growth and unit growth, with unit growth ranging 40 percent through the quarter," he said. Compaq did not reveal sales growth figures on its desktop line, but overall, the company reported a sales increase of 8 percent to $5.7 billion. One reseller said only channel assembly could get things back on track. "The nice thing about [channel assembly] is we will have less dramatic price cuts," said James Leslie, president of OPM Information Systems, in Eden Prairie, Minn. Price cuts may be more frequent but smaller, adding stability to the marketplace, he said. Dramatic shifts and the response by competitors throws the market into chaos, he said. -- John Roberts, Joe Wilcox, Kimberly Caisse, and Craig Zarley contributed to this story. ================ re<it says cause the "" rumor"" is that the chip is not that what INTC promised it to be and thats the real reason why SUN backed away from the chip > SGI is NO a rumor As part of the relationship, SGI will incorporate Intel's IA32 (32-bit) chip technology into its workstation products in the second half of 1998 and port its 64-bit IRIX Unix operating system (OS) to Intel's next-generation IA64 (64-bit) platform, based on the upcoming Merced chip. news.com rumor Intel will be $ 60 vg