Re: HP Buys Compaq

On Wednesday 05 September 2001 07:45 am, Bale, Dan wrote:
>Anyway, the article has an interesting point of view of HP and their
>printer business.  "HP's position in the PC market impedes growth in
>printer market share because their PC competitors have legitimate
>disincentive not to sell HP printers."  Also, this quote given by a
>portfolio manager: "If you were Compaq or Dell, the odds are you would
>rather do business with Canon, Epson, or Lexmark."  Now with the
>acquisition of Compaq, I have to wonder if HP's printer business will
>expand.

Well, it does give Compaq an incentive to deal with them. ;-)

But maybe that is phase two of the plan. I mean, here they leverage their
size and cash to buy Compaq and build a stronger computer business. If they
decide to spin off the printer/imaging business, they can do that later. But
they couldn't have done it the other way around.

I would think it would have been tough for them to want to scrap $20 billion
in revenue and spinning off the HP computer division by itself might have
been death for it costing the stockholders lots of money. This direction
seems to have a lot more potential.

--
Chris Rehm
javadisciple@earthlink.net
If you believe that the best technology wins the
marketplace, you haven't been paying attention.