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

To: rupert1 who wrote (48040)	2/14/1999 5:45:00 AM
From: Elwood P. Dowd	Respond to of 97611

still at the top of the heap...and growing by: csi_satyr (40/M/Bradenton, FL) 54617 of 54621 February 15, 1999, Issue: 829 Section: Systems & Peripherals Challenges Included Integrating Digital, New Sales Metric -- Compaq PC Sales Take Top Spot In World Joe Wilcox San Jose, Calif. -- Compaq Computer Corp. rallied, despite difficulties, to top both the worldwide and North American PC markets for 1998. According to preliminary numbers released by Dataquest, Houston-based Compaq had a 13.8 percent worldwide market share and 16.1 percent in the United States. This represents 20.7 percent and 13.3 percent growth, respectively, over 1997. "That's really fabulous considering what Compaq has gone through this year in the digestion of Digital [Equipment Corp.] and the huge issues of days of inventory in the channel in the U.S. It shows you that Compaq has that business model back on track and is doing quite well," said William Schaub, vice president of Dataquest PC Computing. But the numbers reflect sales into the channel, rather than out, the metric that Compaq switched to following first- and second-quarter 1998 inventory problems. "I think our focusing on sales out of the channel as a key metric is important," said Earl Mason, Compaq's chief financial officer. "I think it's important to the industry, and I know the channel guys like it. It's an important shift to measure the overall market-share growth for the industry. In fourth-quarter financial results recently announced, Compaq estimated year-over-year worldwide growth of 43 percent, as sales measured out of the channel. Growth in North America was 53 percent as measured out of the channel. Schaub defended the decision to measure sales in for indirect vendors and to the customer for indirect companies. "At some point you could sit there and make some argument [that] sales out is the only thing that is important, but what we were really looking at is [that] the financial results of a PC company in a quarter is truly the result of the production of the PC and its sales." But Schaub also hinted increased efficiencies by Compaq and other indirect players could lead to a change in the metric. IBM Corp., Armonk, N.Y., took the No. 2 position worldwide with 8.2 percent market share, but Dell Computer Corp. nipped at its heels at 7.9 percent share. Dell grew at a phenomenal rate compared with IBM and others. The Round Rock, Texas-based company gained 64.9 percent over 1997, compared with 9.5 percent for IBM. No. 4-ranked Hewlett-Packard Co. also showed robust worldwide growth, gaining 25.5 percent over 1997 with a market share of 5.8 percent. Packard Bell NEC Inc. followed with 4.3 percent share, but had negative growth of 4 percent.

To: rupert1 who wrote (48040)	2/14/1999 5:47:00 AM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

top of the heap...2 by: csi_satyr (40/M/Bradenton, FL) 54618 of 54621 In North America, Dell gained 60.9 percent over 1997, taking the No. 2 position with 12.7 percent market share. Gateway Inc. followed at 8.4 percent market share and growth of 38.4 percent. Gateway made its way into the top five based on strong third- and fourth-quarter performances, Schaub said. "It shows their unique approach to the home market and small business by opening up the Country Stores appears to be a nice compliment to their business and success." IBM took the fourth spot with 8 percent share and growth of 10.1 percent, followed by Palo Alto, Calif.-based HP with 7.5 percent market share and stronger growth of 37.1 percent. Apple Computer Inc. failed to break into the top five either worldwide or in North America but earned meritorious comments from Schaub. "In discussing Apple going forward, the next two quarters become critical as they have captured the pent up demand of Apple users. Going forward we need to find out whether some of their [Internet] strategies . . . broaden the appeal of Apple beyond their existing Macintosh family," he said. Several trends emerged from the results, which include consumer and commercial PCs, notebooks and ultraportables. About 37 percent of U.S. households are online, but not enough to reach the critical mass needed to make the Internet a must-have commodity. Women now are the No. 1 users of PCs in the home. On a cautionary note, Schaub said there is now in the United States a saturation of PCs used by people "each day and all day. Those seats have all pretty much been taken up. So we are truly at a replacement stage for that portion of the market." The challenge for the commercial marketplace is to have the double digit growth rate the industry expects, Schaub said. "We need to find ways and methods to maybe step up the replacement cycle." Dataquest also estimated some stability in prices for 1999, with less dramatic declines than in 1998. "What that means is that the growth rate in units shipped starts to sync up with the growth rate of revenue, which is very good news," Schaub said.