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

To: Roads End who wrote (33755)	10/2/1998 10:57:00 PM
From: Eddie Kim	Read Replies (1) \| Respond to of 97611

I'm looking at Compaq's new AMD-K62 350MHZ computer with 17" monitor to give as a Christmas gift. Total cost only $1600. Probably be $100-200 less in a month or two. Comes with all the works: compaq.com

To: Roads End who wrote (33755)	10/3/1998 10:09:00 AM
From: Elwood P. Dowd	Respond to of 97611

Supply Chain Should Stabilize in 4Q October 05, 1998, Issue: 810 Section: Research & Analysis: The Numbers Sheet Supply Chain Should Stabilize In 4Q Robert Anastasi Our third-quarter survey of the industry's largest corporate resellers and wholesale distributors showed a modest uptick in growth of PC systems sales. This is believed to be due to steady unit sales coupled with less steep declines in average selling prices (ASPs). ASPs declined at an extraordinary rate over the past six months due to aggressive pricing to clear channel inventory, lower prices on Asian-sourced materials and more aggressive microprocessor prices. With channel inventory streamlining nearly 80 percent complete at this juncture, inventory-clearance pricing is history, and instead, availability has become the issue. We estimate that overall channel inventories declined by two more days this quarter and by 13 days since the beginning of the year. This 13-day reduction in overall inventories probably translates to a 20- to 25-day reduction in PC inventories, since PCs account for 40 percent to 50 percent of channel inventories, and most but not all of the reduction is believed to be specific to PCs. PC inventory in the channel is estimated to be about 25 days. Unfortunately, the progress that has been made in reducing inventories has not been matched by reducing manufacturing cycle times. New, more stringent price-protection terms (19 days for IBM's new products) are shorter than the typical 21-day manufacturing cycle plus 4 days of transportation time. Although this seems obvious, the disconnect was that PC manufacturers had bet that distributors and resellers would assume some level of inventory price exposure. This was a bad bet. Instead, channel inventories have been worked down below price-protection thresholds and now acute availability issues are surfacing, particularly for IBM and to a lesser degree Compaq. The short run beneficiary is probably Dell Computer, since its model is already moving customers above the constrained 266MHz and 300MHz products and also because their corporate customers are accustomed to brief waits. As a result of availability problems, the remaining 20 percent of inventory streamlining likely will be postponed until next year. Compaq is believed to have postponed its planned reduction in price protection terms to 21 days by September and then 14 days by year's end. Although this merely delays one last quarter of "streamlining pain," it should provide a welcome fourth-quarter relief for PC OEMs, subsystem manufacturers and electronics contract manufacturers. Considering our current analysis, we now believe that the environment for vendors and service providers to the PC supply chain will be substantially better in the fourth quarter. Although there is probably one more week's worth of inventory to be eliminated, that most likely will happen next year as availability is the more pressing short-term issue. On balance, the supply chain could be at "steady state" in the fourth quarter-at least temporarily. If this happens and prices stabilize somewhat, then this bodes well for PC OEMs, component and subsytem suppliers, electronics contract manufacturers and even distributors and resellers.