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

To: Aitch who wrote (32533)	9/9/1998 11:04:00 AM
From: ben.	Read Replies (2) \| Respond to of 97611

you're right, but some of the points you raised are exactly the reason for the stagnation. I have been long on CPQ for a long time, but at the same time, I have kept a log for the three companies. $10000.00 invested in CPQ, DELL & GTW three years ago is worth a little over $30,000.00 for Dell, $23000.00 for GTW and $17000.00 for CPQ. CPQ attempt to be more than a pc maker may be part of their problem. If they channel their energy to making and selling PC, they can't be beat but with their efforts spread too thin, they take longer to react to market changes. Personally, I don't see their takeover of DEC to be much helpful. The reason for this is very simple. DEC specializes in Servers and high end workstations. The problem is that companies are no longer buying that many of those. With the abundant supply of low priced high end desktops that can do what these overpriced workstations and servers do, why buy them. For a little under $2000.00, you can get pentium 3000MHZ with all the whistles and bells. To make matters worst, Intel is coming out with an even faster chip next year that will further reduce the need for these machines. Currently, they (CPQ) is busy trying to convince Intel to adopt their new Bus system, but other PC makers are busy selling Pc and will quickly switch to whatever Bus system the industry adopts. Personally, I don't see CPQ taking the Server market from IBM and their AS400 servers. As for RISC processors, I don't see it catching on due to complexity and price. As long as CPQ continues to sell the bulk of their PC through middle men, they will keep inventories and will be more expensive. I don't want to sound gloomy and I do hope the stock appreciates, but without changes to their marketing model, I don't see that any time soon. My predictions is that CPQ will hit $45.00 and stay there. ben