Compaq takes further direct step

Compaq will infuriate its channel in the middle of this week when it introduces a range of low-end desktop PCs sold to customers directly by its own sales staff. And the boxes may well be built by third parties, giving rise to fears of further job cuts at Compaq manufacturing plants worldwide.

The move will mark a further step in Compaq's plans to slim its model to match Dell and follows reports, exclusively revealed here, of IBM's move to a similar channel model.

Eckhard Pfeiffer, CEO of Compaq, will announce the plans to an audience in the US on Wednesday and will try to justify the u-turn by pointing out the slenderness of margins.

It is also expected to announce that it is going to sub-contract some of the manufacturing of the desktop PCs to so-far unnamed third parties. That is likely to give rise to fears of further job cuts in the Compaq manufacturing superstructure.

While Compaq's UK channel is likely to have the ability to sell the low end, slender priced boxes, the margins will discourage them from so doing.

The boxes will be sold through Compaq's Glasgow call centre in this country. Compaq UK was unable to comment on the reports at press time. ®