It would be helpful if you could answer some questions. Sources have speculated this could lead to some sort of acquisition, a process which critics point out got Compaq where it is today.The information you've provided is helpful, but still a little incomplete for helping diagnose your problem. Compaq does not yet have the capabilities to sell computers like Dell, according to many. The iPaq will only be sold directly, eliminating the middleman's costs, but this adds another wrinkle. Technology Business Research analyst Lindy Lesperance estimates it costs Compaq twice as much as rival Dell for every business system it sells. ![]() It will come only when customers sign up for a subscription.Īs Compaq looks forward to 2000, it's biggest challenge will be reducing the costs of building and distributing computers, which is in part hampered by selling through wholesalers and dealers. Unlike most computers, the product won't be for sale in its own right. Not since Rosen forced out Compaq co-founder Rod Canion in 1991 had the chairman intervened so aggressively in company affairs.Īlso in November, the company announced the Clipper, a simplified Web access device that will be sold through telephone companies and Net access providers such as Microsoft's MSN. The severity of Compaq's problems was apparent to chairman Benjamin Rosen, who in April led the ouster of Pfeiffer, announced on a Sunday following a Compaq customer convention in Houston. That exclusive disclosure, which prompted some financial analysts to call for the CFO's resignation, dogged Mason as the depth of Compaq's problems emerged. At a briefing, Mason disclosed information about the company's financial crisis to select analysts and not to the entire community. In reality PC sales surged industry-wide, with consumer PC sales, for example, growing 40.3 percent the first quarter and 56.3 percent the second quarter, according to International Data Corp.īehind the earnings drama, a subplot unfolded around Earl Mason, then Compaq's chief financial officer. Pfeiffer initially laid the blame on slowing PC sales, but other PC makers said sales were strong. As in the past, Compaq appeared to be trying to sell direct while appeasing its wholesalers, a combination that had yet to work well.ĬEO Pfeiffer then dropped a bombshell to go along with the earlier warning: First-quarter earnings would be half of expectations. Financial analysts increasingly began to raise red flags throughout March, when Compaq unveiled a new dealer program. Rumors surface Compaq may buy a distributor's assembly facilities amidĬoncerns the company may not be ready to meet demand for iPaq.Ĭracks in the facade began to emerge by February, however, when analysts warned that first-quarter results would be lower than expected. Company also shows off "Clipper", a web appliance. Compaq cuts deal with Cable & Wirelessįor application hosting. Near end of the month, Compaq lays off 1,600 in Singapore.Ĭompaq pulls plug on Unix development for Intel's Merced processor, inĬompaq unveils the iPaq, an all-in-one legacy-free PC set the revitalize itsīeleaguered commercial PC businesses. Layoffs of up to 8,000 and a third-quarter charge of approximately $1 billion. Operations into three business units, followed by the sale of AltaVista toīefore Compaq releases second-quarter results. ![]() Pfeiffer is ousted and Mason resigns as Compaq chairman Benjamin Rosenīloodletting begins with the first of several plant closings and divestitures.ĬIO Michael Capellas steps in as chief operating officer, as moreĮxecutives, including enterprise chief John Rose, leave. Pfeiffer controversially blames on industry-wide PC sales slowdown. Fourth-quarter earnings results revealĭraws ire for disclosing financial data to a select few analysts.Ĭompaq issues major first-quarter earnings warning, which CEO Eckhard ![]() Compaq buys, launches on-line sales arm, and spins
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