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Tandy boots IBM
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January 28, 1998: 4:22 p.m. ET
Compaq to become RadioShack's exclusive computer supplier
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NEW YORK (CNNfn) - Tandy Corp., parent of electronics retailer RadioShack, signed a multi-year deal Wednesday with Compaq Computer Corp. that displaces IBM Corp. as the chain's exclusive computer supplier.
Compaq and RadioShack will jointly market a line of Compaq Presario PCs specially manufactured for Radio Shack.
RadioShack will invest an unspecified amount of money to create special departments in every store that prominently feature Compaq computers. The departments are expected to be in all RadioShack stores by the end of 1998.
"Radio Shack is continuously seeking new ways to ensure we are providing the American consumer with greater value," said Leonard Roberts, president of Tandy and RadioShack.
"Compaq is clearly focused not only on building useful innovation into its personal computers, but has proven its ability to flawlessly execute that single idea," he said.
Roberts later told CNNfn that Tandy was satisfied with the relationship it had with IBM, which had been its exclusive computer supplier since 1995. The main reason for the switch, he said, was that IBM is interested in opening stores featuring its computers.
Roberts said Tandy will produce accessories for Compaq's computers. Another reason for the switch, he said, is that IBM already is in the accessory business.
IBM spokesman Will Runyon said the negative impact of the switch will be minimal since the company already has retailing deals with several retailers, such as Circuit City, CompUSA and Tandy-owned Computer City.
"We've been selling very well to our partners in the retail channel We'll rebalance more of that volume to other partners," he said.
Runyon said IBM had been talking to RadioShack about a deal that would have centered around computers as educational tools.
"That involved the PC as the core product, but included other IBM products such as mice, scanners and educational software," he said.
Eckhard Pfeiffer, Compaq's president and chief executive officer, said the deal will put Compaq computers in neighborhood stores throughout the United States "almost overnight."
"RadioShack enables Compaq to broaden its distribution reach into local markets... We will be able to increase our market presence by offering our products in up to 7,000 locations. We believe this competitive edge will result in increased sales and brand awareness," he said.
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Tandy Corp.
Compaq
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