Word: compaq
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...also the worst of times. For most of the companies that make those computers, that market has suddenly become a lethal place. Once successful companies such as IBM, Compaq, Dell and Apple are floundering; profits are plunging, margins squeezed. Last month one of the personal-computer industry's leading lights -- the pioneering Tandy Corp. -- became a prominent casualty. Faced with $52 million in losses in the past year and an even bloodier future, Tandy decided to abandon the PC business, which accounted for 10% of its sales last year. The company simply could not survive the intense price competition...
...strategy is getting the manufacturers of these machines to modify them so they will run his new programs. Judging by the blue-chip companies that will be sharing the dais with him when he unveils his system this week at the Hotel Macklowe in midtown Manhattan -- Hewlett-Packard, Ricoh, Compaq Computer, Minolta, McCaw Cellular, Canon, NEC and Northern Telecom -- he seems to have made remarkable progress. Says Paul Saffo, a research fellow at the Institute for the Future: "This may not be it, but it is one more step toward the Holy Grail of the paperless office...
...time, many of the recent layoffs may not have been necessary. According to a new study by Wayne Cascio, a business professor at the University of Colorado, companies have too often assumed that if the competition was cutting costs by firing workers, then they had to follow suit. Compaq Computer, for example, announced last October that it was laying off 1,000 workers. Yet two weeks later, the company admitted that profits would double in 1992. Firms like General Electric and Campbell Soup continued to slash personnel even though they both just had highly profitable years. "There is tremendous peer...
...INITIAL STRATEGY WAS TO STAY ABOVE THE fray. As American firms like Compaq , and IBM brought low-cost personal computers to its shores, NEC, Japan's foremost personal computer manufacturer, controlling about 50% of the domestic market, loftily insisted that quality should take precedence over cost. But the price pressure got to the company. NEC has announced a new low-priced line, including one model for $1,740, about half the price of an earlier comparable machine...
Intel is also accused of playing favorites. According to one competitor, the company allegedly allocates supplies of its latest, most sought-after chips first to its biggest customers, such as PC makers IBM and Compaq, and then to smaller clients. In doing so, critics charge, Intel can determine which PC maker survives or perishes. Competitors have also raised concerns about Intel's own entry into the PC market. They complain that the company favors customers that resell Intel-made machines with its newest and best chips. Says Walter J. ("Jerry") Sanders, chairman of Advanced Micro Devices: "It's clear...