Compaq demands 15 per cent cuts from component makers

The local Taiwanese press is reporting that Compaq has asked its suppliers on the island to cut their prices by 15 per cent. Earlier this week, Compaq started finalising its plans to sell PCs direct over the Web, rebating former channel partners, soon to be called agents, for passing on sales leads. Compaq prices had been much higher than its direct competitor Dell because of its nearly 100 per cent channel strategy, selling through distributors and dealers. The hardware giant wants Taiwanese manufacturers to assist its efforts to get margins out of PCs. While a 15 per cent cut in prices will hurt many local manufacturers, Compaq buys so much that they may have to bite the bullet. Meanwhile, the press in Taiwan is reporting that Compaq has shifted much of its business from Mitac and FIC, and has recruited local firm Q-Run to deliver 200,000 sub-$499 PCs as part of its push. ®