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

To: Howard Feinstein who wrote (55358)	4/1/1999 11:56:00 AM
From: jim kelley	Read Replies (1) \| Respond to of 97611

Howard, The odd thing about CPQ strategy is that they are copying IBM. This does not augur well for the company since IBM is not making any money in the PC business. They had losses of about 1 billion last year of revenues of about 12 billion and are looking for someway to cut those losses. IBM's service and component businesses have good profits but not its box business. At the low end, in the subzero market CPQ now has to contend with E-Machines rapid expansion into that sector. This should hurt CPQ more than the other companies since they used to have the biggest share of this market. CPQ's internet plans are also going awry. DELL builds Gigabuys for 20 M while CPQ buys their store for 200 million. CPQ tries to go direct and indirect at the same time angering its channel partners. CPQ is getting sued by its shareholders for lying and fraud. Everywhere I look I see a failure of strategic vision on the part of CPQ. This is an interesting case study in how not to respond to the competition. JK