Conference 7.286::digital

    When will these systems be available? The NBR stated that COMPAQ's
    strategy will be to make these themselves rather than build in Taiwan

    I just bought the Professional 1, my price at 20% off was $1599. What
    does Compaq have to compete?
    
    
    The Professional 1
    
    A low profile powerhouse - Highly attractive price.
    
    WHAT'S INCLUDED IN THIS SYSTEM               ORDERING INFORMATION
    
    *  DECstation 320sx (i386sx/20MHz)           Please reference the
    *  5MB Memory                                following model number
    *  105MB IDE Hard Disk Drive                 when placing an order
    *  14" VGA Multi-sync Color Monitor
    *  MS-DOS 5.0, Windows 3.1                   DJ-PC443-A1
    *  Lotus SmartSuite                          EPP PRICE $1,599.20
    
    ** Offer Expires 6/26/92 **
    
    

    A good friend just was in the market for 486 50mhz pc's for his
    company.  He had it narrowed down to Dell and Northgate and was
    comparing prices (including shipping and tax).
    
    I made the suggestion he call our 1-800 number.  He had not considered
    us because our catalog and advertised price were not in the ballpark. 
    I explained that the telephone prices would be street prices and
    competitive, so give it a try.
    
    1.	we did not even have complete, packaged 486/50 systems
    
    2.	our 'basic' 486/33 box was twice as much as the competition's 
    	complete 486/50 system.
    
    3.	both Dell and Nortgate offered Novell-Lite to network his systems
    
    4.	I was embarrassed again
    
    
    If someone in a position to do something wants to call and interview a
    real LOST customer, he is willing to describe his experience.
    
    		-Barry-
    

    I just purchased a system mail order.  I priced everything around
    including DEC -20% and we weren't even in the same state, let alone
    the same ball park.  I ended up purchasing a;
    
    Midwest Micro Elite 486/33 system
    
    	4MB Ram
    	105/15mh IDE Hard Drive
    	1.2   5 1/4 Floppy
    	1.44  3.5 Floppy
    	Game card
    	64K Cache memory exp. 256K
    	SVGA Card with 1 Meg
    	14" SVGA Non-interlaced color .28 monitor
    	Mouse
    	Dos 5.0  installed
    	Windows 3.1 installed
    	Full Tower Case
    	3 expantion drive slots
    	4 expantion card slots
    
    Will operate with the new clock doubler chip.
    
    
    Price??
    
    
    		$  1,750.00 +shipping and COD
    
    
    		Total at the door is,
    
    						$  1,787.63
    
    
    
    DEC 1300 more after the 20%
    
    It's too bad. But then with the overhead this company seem to think it
    needs ther is no wonder.   The same old strategies are being used.  IE,
    We sell to big companies who want the systems installed and want the
    service back-up, so they are willing to pay more for the same hardware.
    
    WE're getting lean and mean. Need to hire some more management to
    manage the changes and the systems afterwards...
    
    
    

The Chairman of the Board of Compaq reached down about five levels of 
management and directed two engineering managers to take on a secret project
to manufacture low-cost PCs.  Upper management at Compaq had been telling
the Chairman it couldn't be done, shouldn't be done, that Compaq customers
wanted big-time machines, not junk.

These two guys went to a big trade show claiming to be Joe and Larry working
out of their garage and managed to get better prices on components than 
Compaq was able to get.  And the quality was much higher than they expected.
They were even able to assemble two pilot models in their hotel 
room during the three days of the show.  They came back and showed it to
the Chairman who set them up in an independent business unit -- still 
secret -- and they put together some plans.  The plans included buying 
almost everything off the shelf, including manufacture.  People at Compaq
eventually heard about it and demanded that they be allowed to bid on the 
work as well.  Internal organizations in Compaq were able to underbid the
outsiders.  The line went ahead.

The Chairman fired the President. who had been out of the loop the whole
time, saying this sort of thing couldn't be done.  The line was introduced
and the IBU was broken up and the people in it scattered all over the 
company to sell the gospel of low-cost and rapid turnaround.

They say the experience has changed the whole company.  Take the time to
track down yesterday's Wall Street Journal for the whole story.

    re: .5
    
    Now, THAT's a STORY!  I loved it!  Good for Compaq!  Good for the
    Chairman!  This kind of thing can and should happen at Digital.  What I 
    wonder is, did the Chairman just come up with this idea, or did the 
    engineers approach him with it, having failed to overcome the system?
    
    Steve

	One more anecdote:

	A colleague here at work just bought a neat-o 486
	system for a dynamite price:

	1) 486-33 ISA bus
	2) 8 mb memory
	3) Diamond STEALTH SVGA controller
	4) 1024 X 768 Optiquest 15 " monitor ( NI. .28 mm dot pitch )
	5) 205 mb Maxtor IDE drive, dual floppies
	6) DOS 5.0 and Windows 3.1 installed
	7) Microsoft Works
	8) 2400 baud FAX modem and software
	9) Soundblaster Pro, CD ROm drive, 6-8 CDROM packages in
		a kit

	Price ?			$ 3229.00 ( and the price went down 
						another $ 134 yesterday ! )


	Steve H

    re .2
    
    That was the EPP price, what would the street-price be?  
    About $3100.00, right?
    

Re: .6

The chairman had the idea.  He had met one of the engineering managers at
a trade show and they had stood around the Compaq booth talking about why
Compaq couldn't make a low-cost PC.  The engineering guy was frustrated by
the situation.  The chairman remembered and at some later time called the
manager in and told him to go for it.  Only the first two guys knew what the
project was all about.  Other people on the team found out (much to their
surprise) after things were well under way.  

I can't type the story in, but if anyone has online access to the WSJ . . .

    
    Responding to the base note, if DEC can't match the prices,
    we will probably end up re-selling the COMPAQ machines.
    
    This seems to be happening with many other productlines as well.
    
    One could ask, what happens to a company when all it sells are
    third party goods and services, and when the margin on these
    services dwindles in a commodity market.
    
    Time will tell.

Extracted from:		(my comments follow footer)
<><><><><><><><>  T h e   V O G O N   N e w s   S e r v i c e  <><><><><><><><>
 Edition : 2599            Wednesday 17-Jun-1992            Circulation :  8080 

VNS COMPUTER NEWS:                            [Tracy Talcott, VNS Computer Desk]

 Compaq - Unveils several new families of PCs. Price cuts. Digital mentioned.
	{The Boston Globe, 16-Jun-92, p. 43}
   Compaq's new family of aggressively priced personal computers assembled in
 the U.S. could put pressure on Digital, IBM and scores of smaller companies.
 "What Compaq has created is a blueprint for a lot of fat and uncompetitive
 companies to follow," said Aaron J. Goldberg, senior VP of International Data
 Corp. of Framingham. "Before Compaq, Digital was competing against companies
 that didn't offer the service and support of big PC vendors. Now Compaq has
 set the bar higher and while Digital has the technology and the capability to
 compete against Compaq by building their own machines, the big question is
 whether Digital has the corporate commitment to follow Compaq. {...}"

<><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><>
    Permission to copy material from this VNS is granted (per DIGITAL PP&P)
    provided that the message header for the issue and credit lines for the
    VNS correspondent and original source are retained in the copy.
<><><><><><><><>   VNS Edition : 2599   Wednesday 17-Jun-1992   <><><><><><><><>
    
    Seems to me that the IDC analyst posed a good question, about whether
    Digital has the commitment to follow Compaq's lead, but missed a point
    that I recognized when reading the WSJ article yesterday.  The enabling
    change required is a major change in corporate culture.  We cannot
    dismiss low price as an essential element for success, as we at Digital
    do (and Compaq did previously).
    
    The WSJ article mentioned that the two engineers who posed as
    garage-shop startup entreprenuers to go on an incognito buying mission
    to Comdex purchased the same components from the same vendors as
    Compaq, but for lower price.  They then discovered that price was
    number seven on the priority list for Compaq's corporate purchasing
    department.  Apparently the vendors had figured out that it was a low
    priority and were taking advantage of that.
    
    Another point was that when they went out and purchased some cheap PCs
    the Compaq engineers who had scoffed at the quality of such products
    discovered that in fact they had been ignorant and incorrect in their
    assessment.  Wonder how much our Digital corporate culture shares those
    traits, as yet without recognizing the situation?
    
    Why has Compaq succeeded in changing their philosophy so dramatically?
    I'd suggest two factors:  leadership from the top, and commitment in
    the trenches.
    
    Which of those can *you* help Digital improve?

    
    
    COMPAQ pricing action drives even their own stock lower....
    
    Extracted from DOWVISION_TEST:
    
    
       <<< SICVAX::SYS$SYSDEVICE:[NOTES$LIBRARY]DOWVISION_TEST.NOTE;1 >>>
                              -< DowVision Test >-
================================================================================
Note 9.42                           Computers                           42 of 42
SDSVAX::SWEENEY                                      39 lines  16-JUN-1992 11:35
         -< PC Stks; A.Brown Cuts Compaq (CPQ) FY93 View To $1.75 -5- >-
--------------------------------------------------------------------------------
Copyright � Dow Jones & Co. 1992
Source: Professional Investor Report
Headline: PC Stks; A.Brown Cuts Compaq (CPQ) FY93 View To $1.75 
Time: Jun 16 1992 1133

Story: 
                By Thomas E. Weber  
  
  NEW YORK -(DJ-PIR)- Shares of Compaq Computer Corp. are lower following an 
investment rating downgrade at Alex. Brown & Sons Inc.  Meanwhile, personal 
computer stocks as a group continue to fall on concerns that yesterday's 
product announcements from Compaq marked the opening move in a PC price war.  
  Alex. Brown analyst Steven L. Eskenazi lowered his rating on Compaq to 
''source of funds'' from ''neutral.''  He says that, regardless of whether the 
strategy unveiled in yesterday's product announcements proves successful, 
Compaq's foray into the low-price end of the PC market introduces some 
uncertainty.  
  ''I'm not lowering my rating because I don't think it's going to work.  I'm 
saying the downside is greater than the upside in the near term,'' Eskenazi 
tells PIR.    
  Eskenazi cut his 1992 earnings estimate for Compaq to $1.45 a share from 
$1.82.  He also lowered his 1993 estimate to $1.75 a share from $2.25.   
  For 1991, Compaq posted earnings of $1.49 a share on $3.27 billion in sales. 
 
  Everex Systems Inc. (EVRX), AST Research Inc. (ASTA) and Zeos International 
Ltd. (ZEOS) are all suffering their second straight day of stock price 
declines.  Dell Computer Corp. (DELL), which rose slightly yesterday, is lower 
today, though not as sharply as the other PC makers.  Apple Computer Inc. 
(AAPL) and International Business Machines Corp. (IBM) are also lower.  
  The Dow Jones index of 14 computer stocks is off 1.31% on a market-weighted 
basis, while the Dow Jones Equity Market Index is up 0.21%.  
  In NYSE-composite trading, Compaq is down 1 5/8, or 5.9%, at 25 7/8 on 
682,300 shares, compared with average daily volume of about 644,000.  
-- 11 33 AM EDT 06-16-92}

    
    Anyone see any analogies with the airline industry?
    
    Price wars benefit consumers for sure.  They also cause
    major shakeouts in industry, leading to eventual consolidation.
    
    We'd best not kid ourselves into thinking that the same
    issues don't await us in the services markets.  Maybe not
    right now, but they will.  Services will lag, but definitely
    follow the same trend.  We'd better get used to brutal, price-based
    competition in every market segment we choose to enter during the 
    coming few years.
    
    Welcome to late twentieth century capitalism.
    
    Glenn
    

    At COMDEX Spring, Michael O'Dell said we RISC dweebs should give up.
    The Intel x86 architecture has won.  I dismissed his comment as very
    biased, but one wonders with prices like this whether the non-x86
    computer market will be a shrinking part of the overall pie.
    
    

    ref
       <<< Note 1943.14 by XAPPL::HOBDAY "SW Development Workbenches, Ltd.">>>
                  -< Who needs Swiss watches when a Timex will do... >-
    
    but your analogy do not map 1:1 to computers world.
    
    when was the last time you've seen someone pay more $$ to buy 
    a watch that runs faster ?!
    
    thank you,
    /nasser
    

       <<< SICVAX::SYS$SYSDEVICE:[NOTES$LIBRARY]DOWVISION_TEST.NOTE;1 >>>
                              -< DowVision Test >-
================================================================================
Note 5.16                           Computers                           16 of 18
SDSVAX::SWEENEY                                      24 lines  18-JUN-1992 13:06
          -< Dell - Lower Priced Line -2: Vows To Keep Up Price War >-
--------------------------------------------------------------------------------
Copyright � Dow Jones & Co. 1992
Source: DJ International Financial News Wire
Headline: Dell - Lower Priced Line -2: Vows To Keep Up Price War
Time: Jun 18 1992 1305


Story: 
  AUSTIN -(AP-DJ)-- Dell Computer Corp. Chairman Michael Dell, adding fuel to 
a growing personal computer price war, said the company later this month will 
introduce a new line of machines to undercut the low-priced Compaq Computer 
Corp. products unveiled this week. 
  Speaking after the company's annual meeting, Dell said there is 'no reason 
to believe' that all of the Dell machines to be unveiled June 29 won't be 
priced below Compaq. 
  Compaq sharply cut its prices earlier this week. 
  'If they've been bold, we're going to be bold plus 40%,' he said. 
  Dell declined to provide details about the new computers or to say for how 
much lower the machines will be sold. 
 
-0- 1704GMT
categoryIndustry I/CPR
categorySubject N/INV N/WER
categoryMarketSector M/TEC
categoryGeographic R/TX
categoryCompany CPQ DELL

    I feel the need to ask this, at this point....
    
    Did Digital's powers that be, have some inside information that this
    type of PC war was going to begin..... Is this why they are offering
    their current line at (what they would call) discounted prices. Are
    they attempting to empty their shelves prior to Compaq and Dell
    machines hitting the street.???
    
    This just smells to much like a fish in the sun to me..! I already bit,
    and bought a DECpc...., but it sure seems strange..., that's all.
    
    Are we being had..???
    
    Curious in DEC..!!!
    
    Bob G.
    

>    Did Digital's powers that be, have some inside information that this
>    type of PC war was going to begin..... Is this why they are offering
>    their current line at (what they would call) discounted prices. Are
>    they attempting to empty their shelves prior to Compaq and Dell
>    machines hitting the street.???
    
    I'm not sure who knew that Compaq were going to make the sort of
    announcement they did. But everyone knows that PC prices are coming
    down all the time, and that therefore emptying your shelves frequently
    is necessary for survival.
    
    Everyone also knows that prices of 486 systems will take a sharp tumble
    when 586s hit the streets.
    
    I don't think you can build a good case for "being had" by Digital in
    the light of aggressive price cutting engaged in by other vendors
    shortly after you bought your system.
    
    Others have built a case for Digital's prices being too high compared
    with the prices offered by the competition at the same time - but that
    one's been beaten to death already.
    
    	Andrew.

    I've watched this discussion go on here and in note 1855 about how our
    PC prices are not competitive.  We have a clear strategy.  It is to
    sell a set of PCs targeting the Commercial Customer who cares about
    consistancy, quality and support from a company they can depend on.  
    
    Have you ever had a customer who tried to network and/or support a
    group of PC from one of the many low-cost PC suppliers?   It can be a
    nightmare.  Most of the suppliers buy the parts in commodity purchase
    that result in a great deal of inconsistancy in the parts.  This
    results in inconsistant performance, lower reliability and a larger job
    to support the differenct components.  I have had customers who have
    quit buying the Northgates, Midwests etc. and come to us at a higher
    initial cost, but a much lower (long-term) cost of ownership.
    
    I myself struggled to find a way to justify buying a PC under the
    current EPP, but did not.  I finally just settled in to make my
    purchase later , with not time deal line (probably with some other vendor) 
    and live with the fact what I was looking for was not sold by my
    company.  My company is focused on another market and from what I
    understand is being accepted quite well in that market.  Our impact is
    being mentioned in most of the journals and can be seen by the changes
    at Dell, Compac and IBM along with the weaking of other commodity
    competitors.  We have made a difference. The question is how long are
    we going to stay in this game and how can we structure it so we can
    afford to?  
    
    

    I was thinking of getting my wife to buy a DECpc 400ST Series machine,
    as the brochure (EC-N0325-69 REL #27/92 04 04) clearly states...
    
        "Of course, the best news of all is the price.  Because thanks
        Digital, you can now have all the power of a 486 PC without
        spending one cent more than you would on a 386 machine."
    
    Of course, after reading the Compaq ad on the back of the Financial
    Post (Canada) of June 17th, she was only going to be spending $995 CDN
    on the 386.
    
    

    Re: Dell
    
    Thursday's USA Today says "The PC price war heats up... June 29, when
    mail-order king Dell Computer comes out with a low-cost line of
    personal computers.  Look for a fully equipped desktop PC with Intel's
    most advanced 486 microprocessor for less than $1,000."
    
    Chris

    .19 just doesn't make sense.  Digital doesn't have a clear strategy.
    The "commercial customer" Digital targets has already discovered that
    sales reps and their associated costs don't add value to commodity
    computer purchases.
    
    Customers who know this market also know that the limitations of the
    hardware vendor to provide technical support around the usage of the
    products.  Customers know where to find that technical support:  It
    might be a copy of BYTE magazine, it might be a consultant paid
    $200/hr.
    
    .19, you've got the "impact" impact wrong.  Digital is not making an
    impact in commodity personal computers.  Digital's market share could
    double, or drop to zero.  Who would know? Who would care?
    
    Commodity personal computers are making an impact on Digital and have
    been since 1983.  Digital was just a little late in recognizing it.

Something positive I received today off the network...
    


                         RESEARCH FIRM SAYS

                 DIGITAL IS FASTEST-GROWING PC MAKER



MAYNARD, Mass. -- June 18, 1992 -- Digital Equipment Corp. is the 
fastest-growing PC vendor in the U.S., according to Computer 
Intelligence, a La Jolla, Calif.-based market research firm.
     Computer Intelligence's PC Market Monitor, a monthly report 
scheduled for publication June 25, surveyed 27,000 corporate 
computer buyers in the past six months.  The report compared PC 
purchasing activity in March, April, and May to the purchasing 
activity in December, January, and February.  Digital enjoyed a 
faster growth rate than any other vendor, the report said.
"This report is significant because it is based on such a large 
cross-section of end-user buying activity," said Dan Ness, senior 
industry analyst, Computer Intelligence.
     "No other vendor has grown as rapidly and consistently as 
Digital, which has jumped from number ten, to number five, to number 
one in the past three months.  The industry has been watching 
Digital to assess how well an established vendor can re-orient its 
approach to the market.  This report is the first solid evidence 
that Digital is succeeding," Ness said.
     "Digital has ramped up PC sales at an explosive growth rate 
since we introduced Desktop Direct in January," said Jay H. Atlas, 
vice president, U.S. Channels, Digital Equipment Corp.  "We are 
successful because we provide the desktop computer manager with much 
more than just a cost-competitive PC.  We can give them one-stop 
shopping for all their desktop computing needs, including a wide 
variety of hardware, applications and networking software, as well 
as multivendor service and operations management."
     Computer Intelligence, founded in 1969, is the leading provider 
of primary market research and analysis to the computer and 
communications industry.  Computer Intelligence's products and 
services are used world-wide by product managers, market 
researchers, as well as sales and marketing executives.  Its primary 
data collection is the result of over 30,000 completed in-depth 
telephone interviews per month of establishments in the U.S., 
Canada, and Europe.
     Digital Equipment Corporation, headquartered in Maynard, 
Massachusetts, is the leading worldwide supplier of networked 
computer systems, software and services.  Digital pioneered and 
leads the industry in interactive, distributed and multivendor 
computing.  Digital and its partners deliver the power to use the 
best integrated solutions - from desktop to data center - in open 
information environments.
                                ####
CORP/92/703
============================================================================
DECnews is sent as a courtesy to members of the press.
For subscription information please contact:
  David Price, USS Press Relations, Digital Equipment Corporation
  Voice:603-884-3467   FAX:603-884-3467   Internet:[email protected]
============================================================================

    That's true after all, it's a Digital press release.
    
    The growth rate when the first system was sold was infinite.  I guess
    if that growth rate is sustainable then every human being on Earth is
    going to be a customer before the year 2000.
    
    What should matter more to us is market share and profitability.
    
    What should matter more to customers is value, quality, and service.
    
    I've just thought maybe it's not important for people not in the
    PCBYDEC operation to understand what the strategy is.  I'm not knocking
    it, I just don't know why we're in this business as opposed to some
    other profitable computer-related business.

.24>       "Digital has ramped up PC sales at an explosive growth rate 
.24>  since we introduced Desktop Direct in January," said Jay H. Atlas, 
.24>  vice president, U.S. Channels, Digital Equipment Corp.  "We are 
.24>  successful because we provide the desktop computer manager with much 
.24>  more than just a cost-competitive PC.  ..."
    
    True, but.
    
    This report discusses growth rate.  That's rate of change in sales. 
    It says absolutely nothing about sales volumes or net revenue value. 
    If we don't make money on those new sales it doesn't help it hurts.
    We've had tremendously glowing self-administered strokes about past
    product introductions in that market space that never generated profits
    sufficient to justify the enthusiasm (can you say "Pro-350"?).
    
    It's a lot easier to show a high growth rate when you have low volume. 
    Add $1 billion per year when you have a volume of $1billion per year and
    you grow at a rate of 100% but do the same thing when you start out with 
    $10billion annually and you show a growth rate of only 10% on the same
    exact increase.  So don't get too cocky just because we are growing
    faster than anybody else, we could be losing market share and still
    show the fastest increase in our revenues, if everybody else is winning
    larger increases but started with larger volumes.
    
    The other question that the report raised in my mind was already
    forming when that quote crystalized it.  Will we still be able to say
    "..we provide..much more than just a cost-competitive PC" after Dell
    ups the ante, or will we have to say "we offer much more *added value*
    instead of a cost-competitive price"?  and will we sustain that growth
    rate if we are not cost-competitive as well as adding value?
    
    And how long before the competition figures out how to add the same
    value?  Personally, I'm almost willing to chance a layoff as the
    opportunity to band together with some other ex-Digits in a startup
    that I think could blow the doors off this company in that market.   
    I don't think we can expect Compaq or Dell to be blind enough to miss
    that same opportunity.

    Of course it's easier to grow fast when you start small, as any toddler
    will be glad to demonstrate.  But if you want to go from small to
    large, it's hard to think of a better approach than rapid growth.
    

    WCRB just broadcast a  Dow Jones news item that Digital has decided to
    match price cuts by Compaq, resulting in price reductions of as much
    as 25% on some of DEC's PC products.
    
    Good things come to those who wait... 

How much money are we going to lose on PCs?

    Where does that leave the price in relation to that offered to all
    the employees who just bought PCs?
    
    Edd

See topic 464 in the CAM3::EMPPURPRO notesfile... (the conference recently
moved... see note 1.13 in (the old) SHALOT::EMPPURPRO for details)

Lee

.28> How much money are we going to lose on PCs?
    
    Hey, no sweat...we'll make up for it on volume.

    ...wow ... they have indeed "declared war".
    
    We lost a deal on 50 units last Friday.  PCbyDEC's price was $2,219
    per unit and COMPAQ's price was $1,468 per unit (for a faster machine).
    
    Bubba

.28> How much money are we going to lose on PCs?
   > 
.31> Hey, no sweat...we'll make up for it on volume.

Eh, disconnect alert. I hope we're making money on each one, otherwise .31
is sizing how deep a hole we're putting ourselves in! I'm into trusting the
PC guys that they're doing the right thing for the corporation though...

								- Ian W.

    Ian, 
    
    .31 was quoting an American joke so old that it has become a cliche.  
    
    
    /rab

>        <<< Note 1943.29 by MANTHN::EDD "Turn 4 (Bang) Turn 4 (Bang)" >>>
>
>    Where does that leave the price in relation to that offered to all
>    the employees who just bought PCs?
>    

Jane Curry gave me permission to post the following. I was one of the people who
ordered the first day, and was afraid I'd get caught in the window -- I'm glad
EPP has done the right thing.

**************** EPP PRICE REDUCTION *******************************

**************** EXCEPTION TO POLICY *******************************

The price reduction which occurred on 29-JUN-92 will be passed along
to ALL employees who purchased equipment from DESKTOP DIRECT between 
18-May and 26-Jun-92.  

Orders received 29-Jun and 30-Jun, have been processed at reduced price.

Please do not call DESKTOP DIRECT to initiate a price reduction request.
All price reductions will be processed automatically, and the decrease 
will be passed along to you as follows:

PAYROLL DEDUCTION ORDERS.
If the order has not shipped a change order will be processed which will
reduce your weekly deduction.  If the order has already shipped, your
invoice will be adjusted which will reduce your loan period accordingly.

VISA ORDERS.
A change will be processed to ensure that your account receives credit.

CHECK ORDERS.
A refund check will be issued and mailed to your home address.

I would like to take this opportunity to personally thank you for your 
order, and your support of the DESKTOP DIRECT Employee Purchase Program.  
We have made some major enhancements to the program and want to ensure that 
we not only measure our success in dollars, but also by customer satisfaction.

                                                   Jane Curry
                                                   EPP Program Manager 
                                                   02-July-92

                         ***********

Subject: DEC, CompuAdd cut PC prices
Date: Wed, 8 Jul 92 11:01:47 PDT
 
     Digital Equipment Corp. announced price cuts of up to 42 percent on
entry-level personal computers in its Desktop Direct catalog Wednesday
and direct-marketed CompuAdd Computers Inc. introduced a new low-priced
computer line and cut prices on current computer models.
	
     The least expensive system in the Desktop Direct catalog entry-level
computer line -- the DECpc 316sx, with a 386SX microprocessor running at
16 megahertz -- is now priced at $935, down 35 percent from $1,449. The
same PC with a color monitor costs $1,085, down 34 percent.
	
     The faster DECpc 320sx model -- with a 20 Mhz 386SX processor -- goes
for $985, down 42 percent from $1,699. With a color monitor, it sells
for $1,135, down 35 percent from $1,849.
	
     Maynard, Mass.-based Digital Equipment also replaced the top-of-the-
line entry level computer in the Desktop Direct catalog -- the DECpc
425c. The 425c had a 486DX microprocessor running at 25 Mhz. It's
replacement -- the DECpc 450DX2 -- has a 486DX processor running at 50 Mhz
but carries the same price tag as the 425c it replaces: $2,499 to $3,
299.
	
     "Today's price cuts establish Digital as a price leader at the low-
end of the PC market," said Jay Atlas, Digital vice president-U.S.
channels. "Digital is already the performance leader at the high-end of
the PC market with the 400ST family of PCs, the only PCs you can buy
today that can be upgraded to the full power of Intel's forthcoming
generation of P5 microprocessor chips."
	
     "Digital has ramped up PC sales at an explosive growth rate since we
introduced Desktop Direct in January," Atlas said.
	
     Austin, Texas-based CompuAdd reduced personal computer prices by 3
percent to 16 percent Wednesday -- marking its third round of price cuts
this year.

     CompuAdd has been one of the industry's most aggressive price
cutters.
	
     The company slashed prices from 9 to 19 percent in February and from 
4 to 30 percent in April.
	
     The base model CompuAdd 325s -- a 25 MHz 386-based system with color
monitor, 2 megabytes of memory and a 40 megabyte hard drive -- was
reduced to $1,154 Wednesday from the previous $1,154.
	
     Its top-of-the-line tower model CompuAdd 433e -- with a 33 Mhz 486
processor, color monitor, 4 MB of memory and a 200 MB hard drive -- was
marked down to $2,964 from $3,265.
	
     CompuAdd also launched a new low-priced line of seven computers
dubbed the CompuAdd "V" Series. The machnes, available in August,
start as low as $899.
	
     In addition, the company said it will expend its customer service and
support programs beginning in August -- including a 24-hour toll-free
technical support line to answer customer questions about hardware,
software and networking.

    .36�425c. The 425c had a 486DX microprocessor running at 25 Mhz. It's
    .36�replacement -- the DECpc 450DX2 -- has a 486DX processor running at 50 Mhz
    .36�but carries the same price tag as the 425c it replaces: $2,499 to $3,
    .36�299.
    
    	It's still too high of a cost!
    
    B.A.

    if we gave it away and went out of business do you think everyone would
    be happy?

    RE .38
    
    There will always be whiners no matter what is done. Maybe a new topic
    should be set up called WHINERS TOPIC.
    
    Of course the whining has slowed down a bunch.
    

    .39�                       -< Maybe we need a whiners topic >-
    .39�    There will always be whiners no matter what is done. Maybe a new topic
    
    	Not whinning, just stating the fact that DEC thinks that these are
    great prices when they need to wake up and see what's going on around
    them!   They are not great prices...FWIW
    
    B.A.

    re -.1:  Please rememeber that Tandy gets a piece of the revenue
    generated by these systems.  This will be changing.
    
    Mark.

    refernce -1
    I asked the question 2 years ago "why do we have to go to bed with
    anyone especially Tandy to produce PCs?" Common sense prevailing we 
    could built our own PCs from the case up using "standard" off the shelf
    parts. Don't believe me just attend any given "Computer Show, Computer
    Fest" or anything you would like to call it. About 2 weeks ago I bought
    at a "computer show" a bare bones 386sx/20 system getting parts from 4
    different vendors;
    	case with 230 watt power supply
    	386sx/20 motherboard
    	2 meg of memory
    	1.44 floppy
    	1.2 floppy
    
    for the measly price of $264.15 with sales tax. 
    I am not a large company ie "DEC" if I were the quantity pricing could
    have been a lot lower. Are we charging too much for our PCs. What do
    you think??????????????????
    	regards
    	John

    what kind of warranty did you get and will you ever see the people you
    bought from again if something doesn't work quite right?

    remember there's a lot more to product price than just what you see
    with your eyes.  There intrinsic and extrinsic value.  Some people are
    willing to pay for that, others are not.

 It sounds like there are a few things missing from this $264 system...

    -  a hard disk (and possibly a hard disk controller)
    -  a video card
    -  a video monitor
    -  a keyboard and mouse
    -  operating system software (DOS and Windows)

 Aren't the hard disk and monitor two of the most expensive components of a PC?
 Adding them will more than double the cost of your system.

 A copy of DR-DOS and a copy of Microsoft Windows will probably run you $180 or
 so - and I'm not sure you could get MS-DOS if you wanted it.

 When you're done, the price will be closer to $1000 than to $264...

    Actually, Jim Liu's new PC business will be building PCs in-house, in
    Taiwan (and associated Asian sites).  His job does include finding the
    best deals, etc.
    
    But when we started with Tandy, our PC heritage was tained by Rainbow
    and VAXmate.  We clearly lacked the internal disciple to bring to
    market a truly-standard machine.  Considerable turnover has occurred
    since then!  And btw, a "bare bones" DEC 386SX box is now something
    like $250, while supplies last.
       fred