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

To: rupert1 who wrote (60832)	5/7/1999 9:52:00 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Compaq expected to cut distributor ranks By Bloomberg News Special to CNET News.com May 7, 1999, 5:10 p.m. PT HOUSTON--Compaq Computer is expected to cut the number of distributors that sell its products to about four from as many as 40 to curb costs and manage inventory, analysts said. The move, the first big decision by chairman Ben Rosen since he ousted chief executive Eckhard Pfeiffer last month, could come as early as Monday, said analyst Kurt King of NationsBanc Montgomery Securities. Compaq's partners are likely to be Ingram Micro, Tech Data, Merisel, and CompuCom Systems, said analyst Ashok Kumar of US Bancorp Piper Jaffray. Compaq wants to winnow the companies that distribute its PCs because it's too difficult to control inventory, gauge demand, and keep costs down with dozens of disparate sellers. In exchange for giving a handful of companies more sales, Compaq likely will seek better terms from its remaining partners. "They'll have control of what demand and inventory look like and they'll get cost savings," said Kumar, who rates Compaq "buy." Do you want to know more? View story in The Big Picture Go to Message Boards Search News.com Compaq has struggled with slowing sales, lower earnings, and a cost structure that made it difficult to compete with No. 1 PC direct seller Dell Computer. Dell builds its machines to a customer's order, helping it hold down its parts inventory and benefit when costs fall, as they typically do in the PC industry. Compaq's problems, exacerbated by a first-quarter profit shortfall and a 40 percent plunge in its stock price this year, led to Pfeiffer's dismissal April 18. "Compaq has been in discussions with our U.S. channel partners to maximize our distribution model. We expect these discussions to lead to refinements in the model," said Compaq spokesman Jim Finlaw. He said the company expects to make an announcement early next week. Ingram Micro and Tech Data already make Compaq's Prosignia products for small and medium-sized businesses and build some others at Compaq's headquarters in Houston. Merisel also works with Compaq to build some machines on site. "Compaq's job of managing distribution will become a lot simpler," said Montgomery's King, who rates Compaq "buy." Compaq is also likely to reduce the amount of price protection it gives to distributors, analysts said. When a computer is sold through a distributor, the manufacturer often guarantees that if prices fall before the machine is sold, it will make up the difference. That makes it difficult to compete with PC makers like Dell, which carry only days of inventory and don't have to offer any price protection. Computer prices can fall as much as 1 percent a week while sitting on warehouse shelves. So-called co-location helps because it means distributors take on more of the assembly tasks, putting the boxes together quickly as the main parts come off Compaq's manufacturing lines. It also lets them build machines as orders come in, which means lower inventory. Other computer-related companies already have made similar moves in consolidating distributors. Apple Computer cut the number of distributors from five to two and Seagate Technology, the world's largest disk drive maker, winnowed its distributors to five from about 12. Copyright 1999, Bloomberg L.P. All Rights Reserved. Front door \| Enterprise Computing \| E-Commerce \| Communications \| The Net \| Personal Technology \| Services and Consulting \| Year 2000 \| CNET Investor \| CNET Radio \| Perspectives \| Rumor Mill \| One Week View

To: rupert1 who wrote (60832)	5/8/1999 1:34:00 PM
From: Lynn	Read Replies (1) \| Respond to of 97611

Victor: That was great--I saved it. If I had to select a passage from the student bloopers, it would probably be this paragraph: The government of England was a limited mockery. Henry VIII found walking difficult because he had an abbess on his knee. Queen Elizabeth was the "Vir- gin Queen." As a queen she was a success. When Elizabeth exposed herself be- fore her troops, they all shouted "hurrah." Then her navy went out and defeated the Spanish Armadillo. I must admit to having written what qualifies as a blooper in my day. It was during an 11th grade AP history examination. Not having completed all the readings for the exam, I was thrown for a loop with one essay on the carrot and the stick. Approaching the essay from what I thought was the only logical way, I plowed ahead (literally) discussing the development of animal husbandry and horticulture, with a focus on increased food production with draft animal plowing. Two days later our teacher announced he had corrected our exams but wanted to read to the class the essay one student had submitted before returning them. He prefaced reading the essay by saying it stood out from every essay he had received, during his entire teaching career, to such an extent that he had to share it with the class. Then he launched into reading my essay. My teacher wiped tears from his eyes as he read it and my classmates, roared with laughter, some of them also crying. My face was beet red and I wanted to crawl under my desk because by then, I knew the essay should have been on Theodore Roosevelt's Central American policy. After reading my essay he announced that he had had a difficult time assigning a grade to it. He said he had finally decided to give it a B+ for creativity. My classmates applauded and I had to fight back the tears [of relief]. Excluding the act of kindness he performed that day, he was one of the two most demanding yet fair minded and compassionate teachers I ever had. Lynn