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Compaq takes on Germany with local assembler-built Pcs

Attempt to boost sickly market share

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This weekend sees the first fruits of an OEM deal between Compaq and a German PC assembler go on sale as Compaq attempts to boost its sickly European home PC market share. With Germany accounting for 25 per cent of the European home PC market and Compaq only managing to rank tenth with just two per cent of the German home PC market, the vendor claims it is now poised to leapfrog its way up the European home PC league tables by getting a German PC assembler to build Presarios in former East Germany. Dresden-based Schaefer-IT-Logistics will build the Compaq-branded Presario 5501. Toon Bouten, vice president for Compaq EMEA consumer PC division, explained that Compaq’s usual sparring partners are no longer the enemy. “Traditionally, we have competed with the likes of IBM and HP, but we have more market share than them and we’re still only at number 10. In Germany, local assemblers account for 78 per cent of the home PC market, so we have to learn to operate like them,” he said. Bouten said he expected Compaq to have reached the number five spot for home PC sales in Germany within six months. German home PC purchasers are very price conscious and have been unwilling to pay for machines with high specifications, such as those sold elsewhere in Europe. The Schaefer-built Compaq PC will not have an internal modem - one feature the German PC buying public turns its nose up at -- and will be priced at DM1699 ($1,007). Schaefer OEMs PC for a number of German retailers and will handle all manufacturing of the cut-price Presario. Product life cycles will be reduced to around four weeks and no price protection will be offered. Bouten said the revised German business model would not work in other European countries, but said it was based on a concept that would.“The key is to develop models that address specific markets. In the UK we have to look at the way local assemblers, such as Tiny, operate.” ®:

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