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

To: BillHoo who wrote (33732)10/2/1998 2:23:00 PM
From: John Koligman  Read Replies (1) | Respond to of 97611
 
Bill,
There was some discussion on the thread concerning this a couple months back. At that time CPQ management made a statement that some of their better margins were actually on the cheaper Presario home PC's. I believe the figures were around 18-20% per box. If you care to dig into the Wall Street Journal's archives, I remember they had a front page article on exactly this. As for the corporate machines, maybe Rudedog can better comment.

John



To: BillHoo who wrote (33732)10/2/1998 6:07:00 PM
From: rudedog  Read Replies (1) | Respond to of 97611
 
Bill
My understanding is that CPQ's consumer division has traditionally targeted a 20% GM but enjoys better net because of a simpler distribution model. Since they are in the enviable position of selling everything they make, they have not been under pressure to lower margins. I would assume that they would maintain targets on new products at whatever price point. In 1H98 the $899 machines were their most profitable even with the $100 rebate.


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