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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (104404)	2/24/1999 7:14:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 176387

Trouble in paradise???? Misadventures of Compaq. Scott: Pat posted this earlier yesterday but here is a different look at it in case you haven't read it yet. ....and they said it is easy to 'emulate' Dell....huhhhh! ---------------------------------------- ...."But industry sources suggested the Internet businesses are causing problems with Compaq's traditional retail stores by undercutting the stores' prices for the popular consumer PC." =============== Compaq halts shipments to Web resellers -------------------------------------------------------------------------------- By Jerry Mahoney American-Statesman Staff Published: Feb. 24, 1999 Compaq Computer Corp., searching for the best way to bridge the gap between retail and direct selling, has stopped shipping its Presario PC to about a dozen businesses that resold them over the World Wide Web. The 90-day suspension will allow Compaq to work out appropriate terms with those businesses, Compaq spokesman Jim Finlaw said Tuesday. He would not disclose those terms. "It's a really important area," he said. "We want to make sure we're assessing that distribution channel in the right light." But industry sources suggested the Internet businesses are causing problems with Compaq's traditional retail stores by undercutting the stores' prices for the popular consumer PC. "The online guys typically are known as discounters," said Amir Ahari of International Data Corp. "Dell highlighted that." Dell Computer Corp., the No. 1 direct seller of PCs, has forced Compaq and other traditional computer sellers to adopt elements of the direct model. But Compaq, IBM and Hewlett-Packard still rely on an extensive network of retail stores for an overwhelming majority of their consumer sales. Online businesses are able to undercut retailers such as Best Buy because their operating costs for such things as inventory are negligible. When they sell a Presario over the Web, they order a Presario from Compaq or one of Compaq's major resellers such as Ingram Inc., forcing them to absorb the inventory costs. "Someone was taking the hit, whether it was a valued partner and reseller Compaq had worked with for years, or Compaq themselves," Ahari said. Observers expect the new agreements to raise the prices that Internet sales outlets pay. The affected Web-based companies include Value America, Buy.com and Shopping.Com, which Compaq plans to acquire.