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

To: rupert1 who wrote (59819)	4/24/1999 9:11:00 PM
From: Gary Ku	Respond to of 97611

Dow Jones Newswires -- April 20, 1999 DJ Interview: Compaq Gains As Asia-Pacific PC Mkt Recovers By Joseph Rajendran SINGAPORE (Dow Jones)--The Asia-Pacific market for personal computers has started to recover and Compaq Computer Corp. (CPQ) is benefiting from this recovery, a key company official said Tuesday. Company vice president and managing director for Asia Pacific Paul Chan told Dow Jones Newswires in a telephone interview that "the (regional) market has picked up in the quarter and we are participating in the pickup". The turnaround is the first in more than a year since the slump in regional economies forced the company to be more conscious of the credit worthiness of its customers. Chan also said there no management changes are planned for Compaq Computer Asia Pacific Pte. Ltd., the regional arm of the U.S. computer giant, in the wake of the weekend ouster of chief executive Eckhard Pfeiffer. "People continue to handle customers and channels. We remain focused on the customer," Chan said in response to developments at the company's headquarters in Houston. Over the weekend, Compaq announced the ouster of Pfeiffer as its chief executive as well as the resignation of Earl Mason as chief financial officer. In the interim, Benjamin Rosen will become acting chief executive together with outside directors Frank P. Doyle, a retired General Electric Co. (GE) executive, and Robert Ted Enloe III, a Dallas executive. Rosen told Wall Street analysts Monday that CEO Pfeiffer was dismissed Sunday because of performance problems including such issues as distribution methods, not over long-term strategy issues. Top executives have since emphasized the need to drive Compaq into the Internet market place and develop electronic commerce more aggressively and the Asia-Pacific division will execute this, Chan said. While the parent company plans to accelerate the emphasis on the Internet, Chan said this process is only starting in Asia Pacific. Chan said the parent company is on a different level in terms of driving the business on the Internet, while the process is only beginning in Asia. "We're just starting in Asia. We've set up on-line stores in Singapore and Malaysia," he said. Since starting to sell PCs over the Internet, "Compaq has done quite a few orders. It is more than just trickles...(but) it's not like its huge numbers," Chan said. The company announced its foray to sell PCs via the Internet in the region in September last year. Chan declined to give details of Internet-based sales as a proportion of overall sales or future targets. But he emphasized that "Compaq will continue to drive this business". On the cards are plans to expand products offered on the Internet from just consumer PCs, raise its advertising profile on the Internet and increase the value its customers can get from shopping on the Internet, said Chan. Chan also said Compaq's PC sales have risen with the recovery of Asian economies but declined to be more specific. The company will announce first quarter results later this week. The company had earlier indicated on April 9 that first-quarter earnings wouldn't meet market expectations. -By Joseph Rajendran; 65 421 4800. More about Compaq Computer Corporation: From leading business publications From The Wall Street Journal

To: rupert1 who wrote (59819)	4/24/1999 9:13:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 97611

Victor: All companies in the sector (as well as companies in other sectors who use distributors) have to deal with the problem of ensuring that there is enough supply in the warehouses by taking the risk of oversupplying and then selling off excess inventory at a discount to make way for new models. Most companies use some form of factoring. This is the nature of the business. Have you forgotten Dell and Gateway? Accounting principles are not adequate to the task of simply revealing the complexities of the real world. You could argue that COMPAQ and other companies should use principles that ensure the most conservative presentation of the value of their inventory and their revenues. But why? So that investors who have put their money at risk can understand the financial situation and performance of the business. That is the function of accounting. Whatever the historical truth, the fact is that COMPAQ has now reduced inventory and factoring to historically low levels. How do you know this, if not through accounting? Remember last quarter when Pfeiffer and Mason were crowing about having taken market share from Dell? Sure, they did it by stuffing the channels. Do you know what Compaq's inventory overhang is in the channel? I don't and I don't think you do either. And that's a problem. Compaq's PC problems stem from the fact that it has an inefficient inventory management model. If it could transition to a direct system it could eliminate the need for factors, eliminate the inventory overhang and take advantage of its component cost advantage. This cannot be done by halves, which is what Pfeiffer tried to do. CTC