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

To: jim kelley who wrote (42941)	1/11/1999 12:02:00 AM
From: kash johal	Respond to of 97611

Jim, Re: 33M CPU's vs 25 million PC's. Clearly the PC volumes are exceeding forecasts. I think there was a 40% year on year jump in December. If you were really concerned about an oversupply situation you would be selling Dell right away as they are limited to the PC market. Compaq is much more diversified than a pure PC play. On the other hand the retail and BTO business are commodities and with the inevitable flattening of component costs Dells margins are extremely vulnerable. Instead of worrying about Compaq which is positioned for growth you should be protecting your backside with Dell which is a one dimensional play. Regards, kash

To: jim kelley who wrote (42941)	1/11/1999 12:03:00 AM
From: rudedog	Read Replies (1) \| Respond to of 97611

Jim - Nothing emotional at all in my response. I suggested that a relatively small number of 2 way or 4 way systems could drive processor demand ahead of unit demand. I suggested that no one knows the 4Q unit numbers. What emotion do you detect from that? I don't think that record sales for intel or the huge 4Q sales numbers in the industry reflect a serious problem for the box makers. Radio Shack is not a big volume outlet for CPQ and does not carry much inventory - I think the average is 4 units per store, so we are talking about a day's production for CPQ to service the whole radio shack deal. As to stuffing the channel, every report shows just the opposite - CPQ cut back hard and the channel partners could not get enough product. Some suspect this is because CPQ was favoring direct sales, which would be reasonable given that CPQ wanted to assure rapid direct fulfillment. In any event, no evidence of channel stuffing. I am always interested in discussing the facts.