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To: Chuzzlewit who wrote (116703)	4/12/1999 2:45:00 PM
From: rudedog	Read Replies (1) \| Respond to of 176387

Chuz - As you know, I am pretty well up to speed on the challenges in measuring real market share. But based on the annual trends we see at IBM and HP, combined with the continuing weakness in CPQ's PC segment, the conclusion has to be that DELL is the one gaining. I don't believe the "hard numbers" showing DELL at #1 already - as you point out, this is comparing apples to oranges. But the trend in the larger commercial accounts is clear and the trend appears to be accelerating.

To: Chuzzlewit who wrote (116703)	4/12/1999 2:48:00 PM
From: jim kelley	Read Replies (1) \| Respond to of 176387

CTC, The CPQ channel inventory buildup was selective. CPQ showed a very high buildup in server inventory in Q4. It was almost 3 times the HWP level and more than IBM which also had a large buildup. Overall, they were up 38% compared to HWP 13% and DELL's 10 %. It is unlikely that the market was up more than 13% in terms of "sell through" to the end user. That means the channel was sitting on a lot of high priced inventory. It also means that the unit inventory levels could be lower while the revenue based inventory was higher than the 5 weeks that we calculated. This is the high margin product that "got sold" in Q4 and helped drive up CPQ's earnings and margin. Unfortunately, it looks like there was not the sell through that CPQ would have hoped for. Yep! Rolling revenue is a much better measure than anyone quarter for CPQ. JK

To: Chuzzlewit who wrote (116703)	4/12/1999 3:01:00 PM
From: Meathead	Read Replies (2) \| Respond to of 176387

Chuz, here is the chart... geocities.com You really don't even need to do a 4q rolling average or anything fancy to see the long term trend. It's obvious that every Q4 it looks like CPQ stole mkt share from Dell and Q1 it looks like Dell stole it back. A simple way for folks to understand this trend would be... In 95,96,97,98 Compaq shipped an average of 3.79, 2.83, 2.4 and 1.71 boxes respectively for every 1 system Dell shipped. CPQ historically acheives only 87% of their Q4 volume in Q1. In Q4 98, the ratio of CPQ shipments to Dell was 1.81 to 1. If history holds true and Dell increases volumes by 9% the ratio will be reduced to an all time low of 1.45 to 1. At this rate, by Q1/Q2 of next year, the ratio will be very close to 1/1. MEATHEAD