From today's IBD ....
Updated ratings:
Stock - EPS - RS - IGRS - SMR - A/D
CPQ - 44 - 80 - ABD
DELL - 99 -95 - AAD
GTW - 95 -93 -AAB
MSFT - 99 - 93 - AAC
INTC - 85 -90 - AAD
CSCO - 96 -95 -AAD
IBM - 90 -88 - ABB
3. Compaq Latest Casualty In The High-Tech Retreat
Date: 3/1/99
Tech stocks lost more ground Friday as Wall Street continued to rein in expectations for the PC sector. Compaq Computer fell 5 5/8 to 35 3/8 on five times average volume after warning first-quarter revenue forecasts were too high. Ten analysts cut profit outlooks in response. Not all think Compaq's sales signal industrywide trouble. But concerns undermined other sectors, especially semiconductors.
Blurb in the NYSE Real "Most Active" -
Compaq Computer gapped down 5-5/8 to 35-3/8 on five times average volume. Compaq warned analysts that sales slowed this quarter among its small- and medium-size customers.
Article on the competition:
Toshiba Takes On Cost Issue Notebook Leader Pushes Ease Of Use
Date: 3/1/99
Author: Nick Turner
Toshiba Corp. is famous for personal computers that are easy to carry. The top notebook maker also wants to be known for machines that are cheap to own.
Total cost of ownership has been a big issue for the personal computer industry in recent years. Instead of focusing on how much a PC costs to buy, business customers are looking at how much they'll shell out in service and support over the machine's lifetime. (See related Databus.)
Most of the ownership cost debate has centered on desktop computers. Now ownership costs of notebooks are getting more attention. Toshiba, Dell Computer Corp. and others are focusing in on criticism over portables' higher failure and theft rates, as well as problems with intricate and expensive components.
''Mobile users need more support because they're doing things on their own,'' said Mike Stinson, vice president for product marketing at Toshiba America Information Systems Inc., the Irvine, Calif.-based unit of Japan's Toshiba.
A notebook's ownership cost is 20% to 50% more than that of a desktop PC, according to Gartner Group Inc. in Stamford, Conn.
Use of the devices, meantime, is rising, and work forces increasingly rely on other hand-held devices such as 3Com Corp.'s PalmPilot. That makes support even more complex, leaving a big opportunity for notebook makers to differentiate themselves, says Chris Goodhue, Gartner analyst.
''Whoever starts to address some of the mobile (ownership cost) issues will carve out a fairly interesting place in the market,'' Goodhue said.
Toshiba claims it's at the forefront. The company points to new data from Gartner and Framingham, Mass.-based International Data Corp. that show its notebooks cut ownership costs.
According to Gartner research, using Toshiba's Tecra 8000 line of notebooks can save businesses $1,060 per notebook over its lifetime. Tecra 8000 notebooks use interchangeable components. The same CD-ROM drives and batteries all work in the various models.
Toshiba also points out a single motherboard supports several different processor speeds on its machines. That means a company's technology manager doesn't have to re-evaluate the system when a new chip comes to market.
So far, though, Toshiba hasn't convinced buyers of its ownership cost advantage, analysts say. Other manufacturers are making their own cases.
''We're closing the (ownership cost) gap between desktops and notebooks,'' said Anthony Bonadero, business planning manager for Dell's Latitude notebooks.
He cites Dell's docking station as an example of progress. Docking stations are used to turn notebooks into makeshift desktop machines. The device provides a connection to a monitor, a larger keyboard, a mouse and other peripherals.
To keep support simple, Dell has kept its docking station the same since 1997 - even as notebook models have evolved. And the device isn't likely to change before 2000 or 2001, he says.
These details may sound trivial. But the benefits of uniform components are large for businesses with thousands of notebook users, makers say.
Even the fact that all of the keyboards are identical on Tecra 8000 models is important, Stinson says. Users don't have to adjust to a new keyboard.
In addition to making notebooks easier to use and support, manufacturers also are working to make their machines as reliable as desktop PCs.
That may forever be a challenge, Stinson says, but it's not really fair to compare notebook failure rates with those of desktops.
''Notebooks face environments that are two to three times more hostile,'' he said. ''Rarely do we get a call from someone who says he accidentally ran over his desktop.''
Mike makes the Leaders and Success section along with Alexander the Great <ggggggg>:
LEADERS & SUCCESS
Entrepreneur Michael Dell How He's Made His Firm The Fastest-Growing Computer Maker
Date: 3/1/99
Author: Nick Turner
When Michael Dell promotes employees, he gives them fewer responsibilities, not more.
That may sound wacky, but the strategy - which Dell calls job segmentation - has been key in ensuring his company's rocketing growth hasn't led to flameout.
Over the past five years, earnings at Dell Computer Corp. have surged by an annual average of 91%.
Sales in the same period are up by an annual average of 48% to $18.4 billion last year. While the increase in sales slowed to 38% last quarter from a year earlier, Dell is still the fastest-growing maker of personal computers and servers.
''When a business is growing quickly, many jobs grow laterally in responsibility, becoming too big and complex for even the most ambitious, hardest-working person to handle without sacrificing personal career development or becoming burned out,'' Dell wrote in ''Direct From Dell: Strategies That Revolutionized an Industry,'' which hit stores in February.
When Dell started job segmentation in the mid-1990s, employees were confused. But the company's explosive growth as the leading direct marketer of computers revealed the necessity of the plan. Even when managers' business units were divided in half, those managers were soon overseeing entities that were bigger than their original units.
Trying It On
Dell also has applied the strategy to himself.
Feeling overwhelmed, he brought in Mort Topfer, a Motorola Inc. executive, in 1994 to share the office of the chairman. Dell focused on products, technology and overall strategy. Topfer handled operations, sales and marketing.
While Dell was working with customers on product development and quality control, giving speeches and meeting with the press, Topfer focused on the day-to-day duties.
In 1997, Dell segmented his job again, pulling Kevin Rollins, who headed company operations for the Americas, up the ranks. Topfer and Rollins serve as vice chairmen, while Dell retains the titles of chairman and chief executive. But the three men run the company together, Dell says.
''I believe pretty strongly that you shouldn't limit a company by one person's ego or by the abilities of any one person,'' he said.
''I've been very aggressive in sharing responsibilities with others. And it's actually been quite easy, because there's much too much to be done. I'm much more focused on getting it done than who did it or who got the credit,'' he said during an interview with Investor's Business Daily.
That spirit is behind another key strategy at the Round Rock, Texas, corporation: ''Everyone's job includes finding and developing their successor - not just when they are ready to move into a new role, but as an ongoing part of their performance plan,'' Dell wrote.
Thanks to the company's rapid growth, few workers have stayed in the same jobs for long. Dell, who started the company in his University of Texas dorm room with $1,000 in capital in 1983, now oversees a global titan with more than 24,000 employees.
He learned one lesson early: Don't hire someone based on the company's immediate job needs. Hire a candidate based on his potential to grow and develop.
Success requires one ''to add talent and organize a business correctly,'' Dell said.
He describes the ideal Dell employee as having an open and questioning mind, a healthy balance of experience and intellect, and an eagerness to make innovations even though the process will entail mistakes.
As the company has expanded, the chief executive has made a point of staying involved in the details. That allows him and other top brass to make quick decisions, he says, because they already know the specific issues at hand.
How does he stay in the thick of things? Roaming around, both physically and in cyberspace, he gets candid comments from employees and customers. It's more important to know your customers than to know your competitors, Dell says.
His best customers aren't the ones that buy the most or require the least help, he says. They're the ones that teach the company the most.
The company learns through more than 300,000 telephone, online and face-to-face interactions each week. Dell himself doesn't keep his distance. He spends 40% of his time with the people who pay him. He'll anonymously log onto chat rooms where ordinary users talk about the company and its competitors, and he sometimes monitors customer-service phone calls.
''I want to come upon someone who's teaching an elderly woman how to turn her system on for the first time,'' he wrote. ''I want to happen upon someone who is stumped by a customer's question - and help answer it if I can.''
When asked why he devotes so much of his time to customers, he replied, ''I thought that was my job.''
Brown-Bagging It
To get unrehearsed feedback from employees, he shows up unannounced at the factory and attends brown-bag lunches with people from all over the company.
Dell says his company is allergic to hierarchy. If he has a problem, he won't handle it through middle management. He'll go to the person who's directly responsible. At the same time, employees are encouraged to ask him questions, either at meetings or via e-mail.
Staying on the cutting edge makes it necessary for employees to embrace new technology, Dell says. That's required some creative approaches at his corporation. For instance, Dell realized in the mid-1990s that the Internet would be key to his business. But he had to get his employees behind the idea.
Dell developed an online literacy quiz called Know the Net, and asked his employees to take it. He staged a scavenger hunt, getting people to find information on the Web.
Some questioned whether employees might use the Net to slack off. But Dell thought that was ludicrous. ''That's like saying, 'We don't want to teach our people how to read because they might spend all their time reading,' '' he wrote.
Dell had faced similar challenges in the mid-1980s when he had to persuade employees to use electronic mail. His technique then was simply to ask them whether they'd gotten the note he'd sent via e-mail.
''No one likes to be uninformed, right?'' he wrote.
Immersing his employees in the Net early on appears to have paid off. Less than three years after starting to sell products over the Internet, Dell now generates more than $12 million a day in revenue from its Web site. |
