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Compaq's monitor move
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March 16, 1998: 3:10 p.m. ET
To slash inventory, world's largest PC maker will offer $300 monitors, gratis
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NEW YORK (CNNfn) - In a bid to slash bloated inventories, Compaq Computer Corp. plans to start giving away 15-inch terminals with its commercial desktop personal computers for businesses.
A reseller of Compaq's business PCs who told CNNfn about the move to give away monitors for certain Deskpro models said the offer will be good for this month. The deal will not apply to consumer models.
The reseller said he believed it would boost sales and profits since resellers can increase their profit margins bundling the free monitors with the systems they sell.
The 15-inch monitors are valued at around $300 and extend memory promotion that had been limited to high-end servers.
News of the pending move comes less than two weeks after Houston-based Compaq (CPQ), the world's largest PC maker, warned it would only break even in its first quarter instead of posting the $500 million profit Wall Street had been expecting.
Compaq would not confirm the reports. It would only say that the company has several announcements planned for later this week.
Inventory gluts are serious for a computer maker's bottom line since they can crimp the company's ability to change its prices as new technologies emerge to supplant old ones.
Compaq has already cut prices sharply in its business line, slashed prices in half on some lines, and offered to double memory in certain products. Compaq said its consumer business, representing about 15 percent of its total sales, is not affected by the backlog and will not be subject to the new promotions.
Compaq is believed to be in a more dire inventory situation than rivals International Business machines and Hewlett-Packard Co.
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Compaq Computer Corp.
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