Developing new line of low-priced PC shakes up Compaq; the chairman went behind chief executive's back to target cheap clones; neophyte in cutthroat niche.

Article Abstract:

Compaq's upper management is in a state of flux as the company moves to create a new low-cost entry-level microcomputer. Chairman Benjamin R. Rosen dismissed Compaq's popular co-founder and CEO Joseph R. Canion, holding him responsible for misleading reports about the feasibility of developing the new units. The new CEO, Eckhard Pfeiffer, is gaining a reputation for cutting product development time and being hard on suppliers. The result is the new ProLinea line of microcomputers, which start at under $1,000. Before Pfeiffer's advent Compac was planning on countering market share losses by a company reorganization and layoffs, with development of low-end computers slated for 1993. Many Compaq officials believed that the company would regain market share as customers recognized the quality of the products. Rosen reversed the strategy. Some claim engineering quality is lower in the new line than has been Compaq's tradition.

Product development, CPQ, Strategic Planning, Marketing Strategy, Pricing Policy, Discount Hardware

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Compaq plans to begin selling some PCs by mail, dipping its toe in new market

Article Abstract:

Compaq plans to enter the mail order market slowly by selling its low-cost ProLinea desktop computers, and its Contura and LTE Lite/25C notebook computers through five mail-order companies. Compaq officials say the move is intended to generate incremental business from customers who buy only from direct response marketers. The company is also careful not to create demand that it cannot satisfy. The five mail-order outlets for Compaq products are Granite Computer Products Inc, Insight Distribution Network Inc, PCs Compleat Inc, PC Connection Inc and USA Flex. These companies will manage ads and incoming orders, and provide a number of service and support functions. Customers will be able to avail of Compaq's three-year warranty, free on-site repairs for one year, and its 24-hour, toll-free hotline.

Computer peripheral equipment, not elsewhere classified, Catalog and mail-order houses, Computers, peripherals & software, Computer storage devices, Marketing, Mail-order industry, Mail order business, Distribution channels, Laptop computers, Notebook computers, PC Connection Inc., Retail/Reseller Channel, Market Entry, Mail Order, Marketing Agreements, Notebook Computer, Compaq ProLinea (Intel-compatible system), Compaq Contura (486-based notebook), Compaq LTE Lite/25c (Notebook computer), Granite Computer Products Inc., Insight Distribution Network Inc., PCs Compleat Inc., USA Flex Inc.

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Cray Research loses big job with agency

Article Abstract:

The US Dept of Energy cancels a planned $72 million, three-year project with Cray Research Inc to help the company develop software for its new supercomputer. A DOE spokesperson says the contract was not reached through a competitive bidding process. Under terms of the proposed project, Cray Research would have placed massively parallel processing (MPP) computers at the Lawrence Livermore and Los Alamos national laboratories and at the company's Minnesota headquarters. DOE computer experts would then have helped technicians from Cray Research and other private firms develop application software. MPP systems have sold slowly, in large part because of a dearth of applications software. Cray Research rivals applaud the contract cancellation, saying it put them at a competitive disadvantage.

Software, Equipment and supplies, Supercomputers, United States. Department of Energy, Supercomputer, Cray Research Inc., CYR, Parallel processing, Government Contracts, Programming, Massive Parallelism

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