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

To: D. Swiss who wrote (33301)	9/23/1998 9:35:00 AM
From: PCSS	Read Replies (1) \| Respond to of 97611

Initial CPQ trades 325/16 (UP 7/16) Michael

To: D. Swiss who wrote (33301)	9/23/1998 11:37:00 AM
From: rudedog	Read Replies (3) \| Respond to of 97611

Drew - IDC measures sales from CPQ to the channel. CPQ throttled back to 50% production to clear the channel inventory. But the channel was selling 2 CPQ machines to customers for every 1 they got from CPQ - that's what drew the inventory down. So sales to CPQ customers were actually about 3.2 million units, but only 1.7 million got reported as sales. Dell's 75% growth was real, as I said. What was not real were the share gains against CPQ. If CPQ's sales to customers had been reported instead of sales into the channel, CPQ's share would have been nearly double, and Dell's would have been reduced by about 20%. Likewise, CPQ's growth was overstated in 4Q98 (in fact for about 6 quarters prior) as they slowly worked the channel inventory up. The overstatement was probably about 7% or 8% each quarter. CPQ corrected all of that in 2 quarters, so their growth was understated in those quarters by about 25% per quarter. Their real growth was closer to 45%. Still not as good as Dell's growth, but plenty respectable. I hope this is clear now.