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


To: jim kelley who wrote (57970)4/15/1999 4:20:00 AM
From: rupert1  Respond to of 97611
 
April 14, 1999


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PC Market Holds Firm, But Investors Still Shaky
By MARIA V. GEORGIANIS
Dow Jones Newswires

NEW YORK -- Intel Corp.'s (INTC) first-quarter earnings report and recent comments from some personal computer makers have assured nervous investors that the bottom hasn't fallen out of the PC market.

However, longer-term concerns remain about the declining average-selling price for desktop computers and whether hardware makers can overcome slowing revenue growth.

"Short-term, the industry is completely average," said Mark Herskovitz, portfolio manager at Dreyfus Technology Growth Fund. "PC unit growth should continue to meet the historic average of mid- to upper-teen rates," he said.

The early indications from Hewlett-Packard Co. (HWP), Dell Computer Corp. (DELL) and International Business Machines Corp. (IBM), as well as Intel's earnings report Tuesday after the close, showed that the first quarter was "fairly healthy," said Brian Salerno, co-portfolio manager of the Munder Net Net Fund.

While Intel expects its second-quarter revenue to be flat to slightly down from the first quarter, this is a pretty typical pattern for the chip company, Salerno said.

The company reported an "astonishingly in-line quarter," Herskovitz said. "Most people were concerned it would be a disaster," he said, noting apprehensions about the demand for Intel's Pentium III chip that shipped in the quarter.

Shares of Intel closed off 3 3/8, or 5.6%, at 57 1/8 on Nasdaq volume of 52.1 million. Average daily volume is 36.4 million.

Recently, Dell Computer told investors that PC demand remains "quite strong." The company also said it expects the overall market to grow at least 14% a year through 2001 and that it should exceed this growth. Hewlett-Packard Tuesday said it expects double-digit PC unit growth in 1999.

In contrast, Compaq Computer Corp. (CPQ) last Friday warned that first-quarter earnings would fall below expectation, blaming a weak industry environment.

Compaq's issues are viewed by many as specific to the company. The company faces two challenges: beefing up its direct-sales efforts to compete with Dell, which has been taking away market share, and integrating Digital Equipment.

"There's no reason to expect the PC business isn't going to grow this year," said Bob Herwick, principal of Herwick Capital Management. "There's clearly a sense that the broad PC space is not that robust, but it's not a disaster."

Despite Dell's recent positive comments, the company reported below-plan revenue growth in its fourth quarter, ended Jan. 29.

"We haven't seen one PC manufacturer above-plan in units," said Jeff Wrona, co-portfolio manager of the PBHG Technology & Communications Fund. "PC units are running slightly below what's seasonally a weak period," he said.



To: jim kelley who wrote (57970)4/15/1999 4:23:00 AM
From: rupert1  Respond to of 97611
 
About Apple but scroll down for Compaq reference.
April 15, 1999


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Apple Profit More Than Doubles
And Beats Analysts' Expectations
By DAVID P. HAMILTON
Staff Reporter of THE WALL STREET JOURNAL

Apple Computer Inc. again sprinted past analysts' profit projections in its fiscal second quarter, as accelerating sales of its iMac and Power Macintosh computers continued to fuel renewed optimism about the company's prospects.

Apple said net income in the quarter ended March 27 more than doubled to $135 million, or 84 cents a diluted share, from $55 million, or 38 cents a share, in the year-earlier quarter. The latest quarter's results included a $42 million nonrecurring gain, consisting of a $50 million gain from Apple's sale of two million of its 9.1 million shares in ARM Holdings PLC and a net restructuring charge of $8 million associated with manufacturing changes.

Company Profile: Apple Computer

Absent those special items, Apple's net income rose 69% to $93 million, or 60 cents a diluted share. Analysts had expected earnings of 57 cents a share excluding special charges, according to First Call Corp.

Apple sales rose 9% to $1.53 billion from the year-earlier period, a respectable but not earth-shattering revenue increase that roughly matched analysts' expectations. But unit sales of Apple's computers rose 27% compared with a year earlier, to 827,000 units, nearly twice the 14% growth estimated for the PC industry as a whole by International Data Corp.

Results Applauded by Analysts

Analysts applauded the results, which Apple released after stock markets had closed Wednesday. Investors, however, were skittish. Apple shares gained 90.625 cents to $35.5313 in trading on the Nasdaq Stock Market, but slid in after-hours trading to $33.75, according to Instinet Inc.

"They look pretty good," said Kevin McCarthy, an analyst with Donaldson, Lufkin & Jenrette. "Apple is free to focus on what it does best -- making great products for consumers."

The latest period is the sixth consecutive profitable quarter for Apple and underscores the steady turnaround of the Cupertino, Calif., computer maker under co-founder and still-interim Chief Executive Officer Steve Jobs. Not only has Mr. Jobs pulled Apple back from what he calls a "death spiral" in just two years, he seems to be winning back some market share from personal computers that use Microsoft Corp.'s Windows operating system and Intel Corp. microprocessors -- the so-called Wintel standard.

"I'm feeling really great about Apple right now," Mr. Jobs said. "The company is really firing on a lot of cylinders now."

Indeed, Apple now accounts for 13% of U.S. retail and mail-order PC sales, more than double its share from a year earlier, according to data from ZD Market Intelligence. "It's a really amazing impact they've had in just under a year," said Matt Sargent, a ZD Market analyst.

Apple, in fact, has enjoyed some of its greatest success attracting first-time buyers, particularly users who want easy access to the Internet. Apple said that 32% of iMac buyers during the quarter were buying their first computer and 11% were converting from Wintel computers. Analysts such as Mr. McCarthy credit much of Apple's popularity to the growth of interest in the Internet, which is equally accessible from both Wintel PCs and Apple's Macintosh computers.

Strong Demand for iMacs

"The Internet is the great equalizer," said Mr. Jobs, who likes to point out that 89% of new iMac customers use the Internet, compared with a PC industry average of less than 30%. "We are betting a lot of our future on the growth of the Internet."

So strong is demand for Apple's multicolored iMac computers that the company's distribution-channel inventories of the machines dropped to just under three weeks from five weeks, Chief Financial Officer Fred Anderson told a conference call. Mr. Anderson said Apple sold roughly 350,000 iMacs and 450,000 Power Macintosh G3 computers during the quarter. Sales of Apple computers rose in all major geographical regions, and soared 52% in Japan, a longtime Apple stronghold.

Product inventories at Apple itself fell to just one day, Mr. Jobs said. "You're seeing a company that's beating Dell [Computer Corp.] in operational excellence," he said.

Apple's results stand in stark contrast to those of industry leader Compaq Computer Corp., which shook the industry last Friday when it announced a sharp drop in its first-quarter profit due to intensified price competition and slumping high-end computer sales. For once, Apple seems to have benefited from its meager presence in the corporate PC market, where price cutting has hit companies such as Compaq particularly hard.

Analysts also are optimistic that Apple will continue to unveil compelling products as the year goes on. The company Wednesday announced a speed upgrade to its iMac line, unveiling a new machine based on a 333 megahertz microprocessor that will replace existing iMacs running at 266 megahertz. In the next month or so, analysts also expect Apple to introduce a new version of its PowerBook notebook computers. Apple officials declined to comment on unannounced products.



To: jim kelley who wrote (57970)4/15/1999 4:26:00 AM
From: rupert1  Respond to of 97611
 
Scroll dow for reference to COMPAQ

April 15, 1999


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Buying a Personal Computer
Is Truly All About Memory
By WALTER S. MOSSBERG

THE PERSONAL computer is in the process of turning into a zero-cost commodity item distributed mostly to generate commerce on the Web, a razor whose underlying purpose is to sell blades.

In a couple of years, anybody who pays a significant price for a very basic PC, or any price at all, may be considered nuts. Even now, the prices keep dropping and the capabilities of low-priced PCs continue to be more than adequate for mainstream purposes. The industry is offering a bunch of attractive name-brand models in the $600 to $1,200 range and an even cheaper tier of choices from more-obscure brands at $600 or less.

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If you have a question you want answered, or any other comment or suggestion about Walter S. Mossberg's column, please send e-mail to mossberg@wsj.com.

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So here's my annual spring guide to shopping for a desktop PC. This guide concentrates on Windows PCs, because buying a Macintosh for home is much simpler: just pay $1,199 for an iMac. Your main decision will be the color.

Processor: The differences between processor brands and speeds in the mainstream PC market are among the least important issues in buying a computer today. Yet they are the key specs the industry pushes.

If you set up a pair of otherwise identical PCs and put a 300-MHz processor from AMD in one and a 400-MHz processor from Intel in another, most people couldn't tell the difference when surfing the Web, or using e-mail, word-processing and most other common software.

So my strong advice is to avoid the highest chip speeds, unless you are a very heavy-duty game player. Celeron, Pentium II, AMD K-6 and Cyrix processors are all OK. Just get one that runs at 300 MHz or faster.

WHAT ABOUT Intel's new Pentium III? Well, for hundreds of dollars extra, it offers a small amount of added horsepower, and some significant performance gains when using the few software titles and Web sites that have been specially modified for the new chip. Still, it doesn't make sense to buy one unless you are a big-time game player or do a great deal of video creation and editing.

Memory: This is the most important choice you'll make. Get at least 64 megabytes, and 96 or 128 megabytes if possible. It will make all the difference in the speediness of your PC.

L2 Cache: This is a dedicated memory bank that the processor uses to speed up its operations. It's a must. On a Pentium II or AMD chip, it should be 512 kilobytes. On a Celeron, which uses a more efficient design, 128 kilobytes is enough. Hard Disk: Try for at least a six-gigabyte size, but you can settle for four gigabytes if your budget is tight.

Internet: Make sure the PC is well set up for the Internet. Almost all now have at least a 56K phone modem and built-in Web browsers with offers of Internet access. If you plan to use a cable modem, try to buy a PC with a built-in Ethernet networking connection, because cable modems typically use such hookups.

Video System: Don't be confused by all the video terminology. Just look for at least four megabytes of video memory, which is usually separate from the PC's main memory. You'll want more if you're a gamer.

Monitor: Eyesight matters. So get at least a 17-inch model, for maybe $350 to $450. For $800 to $1,100, you can get a 15-inch flat-panel monitor -- an LCD, like the screens in laptops -- that is sharp and bright.

Mass Storage: Most PCs have a CD-ROM drive, but some boast a DVD drive that can play both CD-ROMs and DVD-ROMs, which have a much higher storage capacity. I still think there's not enough software on DVD to justify the extra cost. I do, however, like Zip drives, which for little added cost let you save and transport large files.

Ports: In addition to the usual serial and parallel ports, look for two USB connectors. This is a very important new kind of junction for add-on hardware. If you're planning to transfer a lot of video to and from the PC, look for an even faster new port called either 1394, Firewire or I-link.

Brands and Models: All PCs are similar, but unless you're a techie, I advise sticking with name brands like Compaq, Hewlett-Packard and IBM. In this group, the low end is Compaq's Presario 2286, a $599 machine with basic specs. Even though its memory is a bit low, at 32 megabytes, it's great for running America Online and doing schoolwork and basic games.


Moving up a bit, HP has a new Pavilion model, the 4455, with 64 megabytes of memory, a six-gigabyte hard disk and a 400-MHz Celeron processor, for $899. Compaq's Presario 5280, at $1,199, has 96 megabytes of memory, a whopping 12-gigabyte hard disk, a Zip drive, Ethernet for cable modems and a 433-MHz Celeron processor.

A small outfit called Microworkz has caused a stir by announcing a $299 PC called Webzter Jr. But this machine has no CD-ROM or floppy drive, and suboptimal memory and hard-disk capacities.

To get close to what you need, you have to move up to the model called just Webzter, at $499, and there are other costs. The machines aren't sold in stores, and shipping adds $75. Free phone support is offered for only two weeks.

Tear out or print out this column and take it to the store, or have it next to you when ordering from a Web site. Don't buy more PC than you need.

For answers to your computer questions, check out my Mossberg's Mailbox column in today's Tech Center



To: jim kelley who wrote (57970)4/15/1999 4:29:00 AM
From: rupert1  Respond to of 97611
 
AV mentioned towards the end -

April 15, 1999


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Sector Growth, Reliance on Resellers
Blur Compaq's New Focus on Internet
By GARY MCWILLIAMS
Staff Reporter of THE WALL STREET JOURNAL

HOUSTON -- With thousands of customers applauding, Compaq Computer Corp. Chief Executive Eckhard Pfeiffer opened his biannual customer extravaganza here this week by sketching a vision of Compaq as the corporate world's key supplier of Internet systems.


As stage lights twirled around him, Mr. Pfeiffer on Tuesday promised that the Houston computer maker will grab the reins and drive the Internet by assembling technology and services gleaned from its new Digital Equipment and Tandem Computers units.

It should have been a vintage moment for the 57-year-old CEO, who built Compaq to $31 billion in annual sales after taking over a struggling company in 1992 and pledging it would become the world's largest seller of personal computers. To get there, Mr. Pfeiffer put Compaq on a searing growth path, recruiting 10,000 dealers and resellers, and whipping together an unrivaled PC-manufacturing engine.

Troubling Hurdles

Now, though, Mr. Pfeiffer's credibility is marred and his company is hurting once again. Compaq still holds on to the largest share of the PC business, but its disclosure that first-quarter profit totaled half of Wall Street's expectations raises troubling hurdles for his ambitions. At a time when Compaq must realign its sales approach and culture to offer corporate buyers packages of systems, software and services, its PC engine is sputtering.

"The company, despite its past success, is probably in the most perilous position in its history," says Warburg Dillon Read analyst Charles R. Wolf.

The problem: PC growth and the company's reliance on resellers. "While the company's direction is on target, at the end of the day 50% of its revenues are from desktop and notebook PCs," says Philip C. Rueppel, managing director at BT Alex. Brown. He estimates Compaq's 1999 profit will come in at $1.77 billion, or $1 a share. That is below 1997 income, despite a 60% jump in revenue to an estimated $40 billion.

The worries go beyond the questions about demand. An expected surge in PC purchases by businesses finalizing year-2000 bug fixes hasn't materialized. Meanwhile, corporate PC buyers are more often buying lower-priced PCs. So, direct sellers such as Dell Computer Inc. and Gateway Inc. are grabbing a bigger share of the profits by catering to more-profitable segments such as servers and home-PC enthusiasts.

Despite fierce pricing pressures that are cutting into profits, Mr. Pfeiffer is confident that Compaq's PC business is continuing to gain market share. Compaq's industry-leading share of the business means it must develop ultra-low-cost machines earlier than rivals such as Dell, he says. "If we can sell $600 boxes at a profit, we can leverage that know-how for the [division that] builds $1,000 boxes. We've taken steps to make it happen," he says.

What isn't as clear is whether the company's recent missteps suggest Mr. Pfeiffer has lost the formula for delivering on such ambitious goals. Two years ago, the company set out to build major businesses in networking and workstations. Last year, it wrote off a big networking acquisition, and it recently disbanded a separate workstation division. The latest profit setback indicates Compaq also hasn't reversed declining sales of high-margin minicomputers. Says BT Alex. Brown's Mr. Rueppel: "There's a combination of a soft PC industry and execution" problems.

A Work in Progress

The melding of Digital Equipment remains a work in progress. Compaq has kept to its cost-cutting plan, but the profit shortfall in the first quarter signals that product sales are lagging. The Digital minicomputer's share of the computer market "hadn't grown in years," say Kim Brown, an analyst with Dataquest Inc. "Compaq hasn't made much headway with it," he says. John T. Rose, senior vice president of the enterprise computing group, which includes the Digital products, says new, higher-performance minicomputers due out later this year will put Compaq into a richer segment.

Company Profile: Compaq Computer

Mr. Pfeiffer says the company plans a comeback in workstations, and points to its PC share gains last year as proof Compaq can fend off PC competition while integrating Digital and Tandem Computers. The minicomputer business should rebound this year, executives say. And while critics say Compaq is having trouble sorting out its efforts to sell directly to customers and its dealers' roles, Mr. Pfeiffer insists, "we're working in a complementary way."

Analysts think the company has the technology to pull off its Internet ambitions, but believe it will struggle until it can solve problems of overlapping sales outlets and product strategies. Compaq calls its use of direct sales and dealers "customer choice." But critics call it overly complex. "Customer choice is all well and good but when it reaches customer confusion, that's another thing," says Laurie McCabe, an analyst at Summit Strategies Inc., Boston.

Changes in the way corporations are buying PCs are hurting Compaq now. Big buyers such as Ford Motor Co. and Aetna Inc. are reducing their PC suppliers and buying more middle-of-the-road machines, forcing companies to bid low and leaving skinny profits to the winner. Malcolm Welch, a computer executive at Aetna, says the insurer expects it can "buy down" the manufacturer's price list because more applications are shifting to Internet servers. "We'll get significant savings from that," he says.

Michael J. Winkler, senior vice president of Compaq's PC Products Group, says that while competition is making it more difficult to profit from PCs, Compaq is moving quickly to offer packages of services with its hardware. The trend "doesn't augur well for a pure box seller in that environment," he says.

That makes the company's new Internet goals all the more compelling. And with Compaq shares down 43% so far this year -- they closed at $24.25, up 37.5 cents, in New York Stock Exchange composite trading Wednesday -- a little of the Web's glitz could go a long way toward appeasing angry shareholders. The company is planning to sell off part of its stake in the Alta Vista Co., a Web search site that has been beefed up with electronic shopping. Executives say the sale, through a planned public offering of stock, could come as soon as this summer.

With interest in Internet stocks at an all-time high, Compaq shares could get a boost from Alta Vista's valuation. But before it can claim leadership, Compaq concedes it has yet to figure out how to judge progress. Mr. Pfeiffer says Internet leadership isn't easily pinpointed. "We're in the process of determining how we'll measure that leadership," he says. Divining a benchmark might be easier with a PC business on steadier ground.



To: jim kelley who wrote (57970)4/15/1999 4:33:00 AM
From: rupert1  Respond to of 97611
 
Scroll down for COMPAQ reference

April 15, 1999


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Sun Microsystems Sees Huge Internet Growth in China
Dow Jones Newswires

SHANGHAI -- A new wave of "Smart devices" - computerchip-enhanced products that can solve problems - could allow China to leapfrog generations of traditional products and spark an explosion in Chinese Internet use, Sun Microsystems Inc. (SUNW) executives said.

"These next two or three years are big years - just as the cell phone swept across China, so a new kind of device will (reach the country)," connecting China to the Internet said John Gage, Sun's chief researcher and a founder of the company.

Gage, in Shanghai to speak on electronic commerce in China, said Wednesday that Sun sees this next shift in technology bringing fast-paced growth to the company's China operations.

Gage said the personal computer industry faces huge changes.

"Microchip developments will make it possible to make personal processors that cost $50, not $500... that will hurt dinosaurs like Sun, and Microsoft, and Compaq," he said.

These cheaper chips and more access, as well as an effort by the government to bring more people onto the Internet, look set to spark a surge in the number of Internet users in China, he said.

That would be a boon for Sun, which provides Internet and intranet technology in China. Sun has already provided the necessary technology to build many of China's current networks, including one linking China's universities to the Internet.

Next year, the number of Internet users in China could easily surpass 10 million, said Vincent Lin, chief consultant for programming in China for the U.S.-based company.

And the number of China's Internet users could surpass the number of users in the U.S. in as little as five years, Lin said.

Sun Sees Profit Growth Over Next Few Years In China

In 1998, China generated less that 5% of Sun's total revenue, said Frederick Sit, general manager of Sun Microsystems China. But Sun expects rapid growth to come from the country in the next few years, he said.

"The idea of linking China is our driving strategy for expansion," Gage said. "Our strategy has always been: Open the technology up and smart people globally will contribute."

In addition to computers, industries such as autos, home electronics, power supply, and personal computers "are on the verge of a fundamental revolution in efficiency," he said.

"New electronic devices will carry a program in them that can explain how to use them with other machines," he said. For example, any printer will be able to connect to any computer without a pre-installed program, he said.

Gage said Sun's initial clients in China included ministries, universities, and government institutions.

Now, China's largest telecommunications firms, China Telecom and Unicom, as well as two of the country's five primary commercial banks, the Bank of China and the Industrial and Commercial Bank, are among Sun's customers.

Gage also voiced concern about the recent "frenzy" over Chinese spying allegations, and expressed hope that the affair wouldn't damage relations between the two countries. -By Joshua Cherin; 8621-6218;3268; jcherin@ap.org



To: jim kelley who wrote (57970)4/15/1999 4:35:00 AM
From: rupert1  Respond to of 97611
 
Posted 14/04/99 8:30pm by a reporter at Innovate, in Houston

Pfeiffer very unhappy about Intel Merced

Our stringer at Compaq Innovate said today that Eckhard Pfeiffer, CEO of the company, refused to demonstrate the Intel Merced emulator.

Instead, Pfeiffer demoed Windows NT64 on the Alpha platform, while blatantly snubbing Merced IA-64 solutions, as predicted here.

Pfeiffer, forced to demonstrate an emulation Merced platform at Winhec last week, chose the four CPU Alpha path at Innovate, our reporter said.

Said our reporter, who chose not to be named: "Compaq reprised the April 7 WinHEC 99 demo with the same hardware and software used last week in Los Angeles. The hardware consisted of a 4-CPU AlphaServer 4100 with 7GB of memory; the software was 64-bit Windows 2000 with 64-bit SQL Server.

"Compaq ran the same SQL query used in last week's demo with the same results: a SQL query that took ~11 minutes on 32-bit SQL Server completed in ~30 seconds on the 63-bit instantiation."

He added: " Last week's demo took place in a carefully controlled environment: Steve Ballmer was the only person who had direct acess to the demo system. Here at Innovate 99 in Houston, security restrictions were a bit more lax. The 64-bit OS has the same look and feel as the Beta 3 release of 32-bit Windows 2000 we run in our home office... it just runs WAY faster." ®



To: jim kelley who wrote (57970)4/15/1999 4:37:00 AM
From: rupert1  Respond to of 97611
 
DELL - Intel not Inside?
The Register
AMD to ship K7 in July

A poster on one of the myriad investor conferences claims to have heard AMD's CEO, Jerry Sanders III, outlining futures of the K7.

According to the post, Sanders said a tier one OEM will ship a K7 box in July. At the same time, AMD's K62 mobile chip will appear in an IBM StinkPad and in machines from Compaq, Toshiba and NEC.

According to the report, the K7 will drag in Dell to support AMD processors, while Dresden will ship .18 micron technology in Q1 of next year using copper technology.




To: jim kelley who wrote (57970)4/15/1999 4:46:00 AM
From: rupert1  Read Replies (1) | Respond to of 97611
 
Reverend Kelly: "and the rest of you are sheep to be shorn"

And you are the Good Shepherd! So nice of you to warn us. We all look to you for unbiased commentary.

Why no channel-stuffing rant yesterday? You remind me of Seventh Day Adventist trying to work everybody up about the end of the world on a specific day, then when the day comes and goes, you say "Never mind, let's talk about something else".