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To: rudedog who wrote (58432)	8/15/1998 6:15:00 PM
From: jim kelley	Respond to of 176387

DOG, I think that you are stretching it a bit. The article does not say CPQ is outsourcing " subassembly manufacturing " to Taiwan. It says that CPQ is outsourcing "manufacturing" to Taiwan. Also, there is no known way that CPQ could be doing their own manufacturing in Houston and have 100 turns per year on these products. The article is not talking about laptops it is talking about consumer desktops. But thanks for adding laptops are also made in Taiwan via outsourcing contracts. As far as the 20% margins are concerned this is only part of the story. What we should be looking at is the operating costs plus the cost of goods. Note: this article uses old data to support it claims. What we do know is that CPQ has no significant operating profits in sight for sometime to come despite claims of unit growth and sales through the channel to the end user that can not be verified because of CPQ's purposeful obfuscation of their financial statements. I am greatly impressed by the marketing communications department at CPQ. They have managed through their fragmentary news releases to completely baffle the market and the analysts with BS. PT Barnum would have loved this! Remember Dog, the shareholder is the ultimate enemy!