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

To: Maxer who wrote (25403)	5/1/1998 11:18:00 PM
From: WeisbrichA	Read Replies (2) \| Respond to of 97611

Aloha Maxer, RE: I would like to see Compaq market into the same territory that Dell is doing a nice job at. $2.5K to $8k machines. Good margins there. You must have missed something. Compaq does quite well in that marketplace with mostly servers, some desktops. The channel of distribution for that product has been Resellers. They are sometimes called "Value Added Remarketers" (VARS). They bundle together applications/solutions/installation/support with the vendor's hardware( CPQ, IBM, DEC, HWP, et. al.) Dell sells retail direct to end users with no such package. They sell good cheap boxes with a win O/S and some productivity tools. The retail channel is quite different as has been pointed out ad naseum on this thread. Mail order, phone, or web, all go directly to the end-user. There is no distributor or VAR involved in the delivery system. The costs of delivery into the retail channel are significantly less. The profit margins on direct sale may surprise you. In summary, CPQ is in markets which range from $800 home PC's to $3,000 departmental servers to $150,000+ ProLiant Enterprise servers. As CPQ grows to be more like HWP and IBM, they will employ catalogue/web direct sales for commodity items, resellers for products with intermediate support requirements, and vendor direct at the top end of product offerings (the large DEC mainframe offerings). Mahalo RW