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

To: Kenya AA who wrote (51088)	3/2/1999 1:34:00 PM
From: rupert1	Read Replies (1) \| Respond to of 97611

Found this in the Raging Bull curio shop. It's about VAR conflict. ______________________________________________ By: Reity Reply To: None Tuesday, 2 Mar 1999 at 1:06 PM EST Post # of 737 Buzz around VAR community. Here is some of the buzz I am hearing around the VAR community (value added resellers). Essentially many VAR's feel that Compaq is now positioning themselves as a competitor instead of a partner to the reseller channel. This first started with their need to compete against Dell. So they started a program of selling direct. This caused some stir, but came through fine. But Phase 2 is on the horizon as Compaq is starting to mobilize the former Digital service fleet to capture more of the lucrative services market. This last one is really just starting to make itself apparent.So, what does this mean (if it is true)? It means that if Compaq is viewed as a competitor, then VAR's will probably switch from selling Compaq equipment to either HP or IBM. This is obviously bad in the short term for Compaq. But I profess that in the long term this strategy will work. Imagine Compaq selling their PC's at cost to win market share. Not even Dell could sell this low for comprabable products. Then they swoop in to sell service agreements or build the companies network etc. to make the real profit. This is a recipe for great earnings, but it won't come without a few lumps. Thus, long term investors may want to consider how this strategy will pan out re: the stock price. I am in the camp that things should get rougher in the short term. But the long term picture is exciting. Stephen Reitmeister, Editor of the Reitmeister Investment Newsletter (RIN) shrike.depaul.edu - Free RIN Update available