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

To: QuentR who wrote (54802)	3/25/1999 9:57:00 AM
From: rupert1	Read Replies (1) \| Respond to of 97611

QuentR: The article suggests that IBM is trying to distance itself from PC's not embrace a new PC acquisition! The idea that it will get DELL to manufacture for it is also hard to swallow. Why would DELL go into the business of low-margin manufacturing: if DELL insisted on good margins for its "IBM boxes", how is IBM going to compete for price against a COMPAQ? If you believe DELL, one of the major barriers to its own growth is the scarcity of plant and human resources. Why should it ration itself further to provide facilties for IBM? And IBM using DELL' marketing system? We keep hearing about how DELL systems and employees live and breathe DELL - why would they break their necks to sell for IBM and give it market share? To understand the DELL/IBM pact you have to understand IBM's motivation, not DELL's. IBM made a great sale. It will offer the same kind of deal to anybody who will guarantee it 7 years of sales. I think COMPAQ will benefit. IBM's ambivalence will not stand up to CPQ's drive to catch it up. COMPAQ's huge market share in PC's providing an ever wider and more entrenched basis to sell other products and services.