Compaq product revamp to bear fruit in June

A flurry of new products designed to keep Compaq on top of the PC industry food chain will start rolling out in June, when the company releases its first quad-processor Pentium Pro-based system, upgraded portables and corporate desktops.

In a promise to its customers last week - or a warning to its competitors - Compaq outlined broad plans to completely revamp its product lineup starting in June, with systems designed to create a new price point for users while increasing Compaq's overall margins.

The new Compaq lineup is expected to include single- and dual-processor desktop systems designed for Windows NT and thin-and-wide notebooks, sources say.

Although all of these systems have long been anticipated, they will also demonstrate Compaq's strategy of joining with key industry allies to offer state-of-the-art technology, which will enable Compaq to maintain higher-than-average margins while staying competitive on a price- performance basis, sources say.

The strategy would include working closely with Intel to more quickly incorporate faster processors and new chip sets, with Micron Electronics to get early access to Extended Data Out memory with parity checking, and with other peripheral vendors for access to such devices as a PD-CD drive that can read CD-ROM discs and write to a 650Mb magneto-optical disc.

Since the launch of the Compaq Scanner Keyboard and PD-CD at the Computerworld New Zealand Expo, Compaq has announced pricing and availability for the rewriteable PD-CD.

Stocks are available now with suggested retail pricing for:

PD-CD SCSI Drive - $1175 plus GST

PD Disk (media) 2-pack - $165 plus GST

PD Disk (media) 5-pack - $355 plus GST

An example of Compaq's strategy will be a Pentium Pro-based quad- processor server based on the PCI architecture and equipped with a 200MHz processor with 512Kb of on-chip cache.

Although Compaq has not set firm prices yet, sources familiar with the system say Compaq's current aim is to bring in an entry-level, single-processor system for about $US12,000.

But versions of the server configured for specific markets, such as a quad-processor intranet server complete with database, firewall, management, and service and support being planned by Compaq, would provide Compaq with a high-margin, value-added solution as well, sources say.

In New Zealand, Compaq has announced a raft of server promotions and price cuts. Compaq is offering more processing power by bundling second processors to the value of $7500 plus GST free with all ProLiant 4500 systems. It is also offering price reductions of 14% to 27% on server memory, 225 to 58% on processor boards, up to 26% on uninterruptible power supply options, and up to 12% off ProLiant 1500 midrange servers.

Compaq will also start incorporating more leading-edge technology into its systems, including high-speed synchronous DRAM, the multipurpose PD-CD drive, and a high-capacity 120Mb floppy drive.

Those peripherals will also show up in Compaq's desktop systems, including a Windows NT desktop based on Intel's Natoma chip set, sources say.

Compaq will update its notebook offerings starting in June, with larger screens, faster processors, and lighter weights. In the mean time, Compaq New Zealand has reduced its desktop and memory prices by five to 28% for the ProLinea and Deskpro business desktop machines and Contura and LTE 5000 notebook products. Prices on memory for the Compaq desktop range have been reduced by 5% to 15%.

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