Compaq's Big Boot: A Threat to IBM and a Shift in the Computer Industry

Strategic Insights -

Compaq, in a move seen as a significant threat to IBM's dominance in the computer industry, has convinced RadioShack to replace IBM personal computers with Compaq PCs in its 7,000 stores starting in March. This announcement comes just two days after Compaq agreed to buy Digital Equipment Corp., a move that further erodes IBM's position in the computer network setup, running, and service market. Analysts see Compaq's separate but swift moves as a sign of the company's rapid growth and its goal to rival IBM as the world's leading supplier of computers and services.

Key Takeaways:

  • Compaq has convinced RadioShack to replace IBM personal computers with Compaq PCs in its 7,000 stores starting in March, marking a significant threat to IBM's dominance in the computer industry.
  • Compaq has agreed to buy Digital Equipment Corp., a move that further erodes IBM's position in the computer network setup, running, and service market.
  • Compaq's separate but swift moves are seen as a sign of the company's rapid growth and its goal to rival IBM as the world's leading supplier of computers and services.
  • Harnischfeger Industries Inc. is selling 80% of its materials handling unit for $340 million to Chartwell Investments Inc.
  • Philip Morris Cos. Inc. reported a 12% drop in fourth-quarter earnings due to expenses in settling a Texas lawsuit and charges for realigning its international food business.
  • Wisconsin Central Transportation Corp. reported record results for the fourth quarter and 1997, with quarterly earnings of $17.7 million and annual earnings of $77.4 million.
  • Anchor BanCorp Wisconsin Inc. announced record earnings of $5.7 million for the quarter ended Dec. 31.

Statistics:

  • Compaq PCs will replace IBM PCs in RadioShack's 7,000 stores starting in March.
  • Compaq is buying Digital Equipment Corp. for an undisclosed amount.
  • Harnischfeger Industries Inc. is selling 80% of its materials handling unit for $340 million.
  • Philip Morris Cos. Inc. reported fourth-quarter earnings of $1.3 billion, or $0.53 per diluted share, on revenues of $17.3 billion.
  • Wisconsin Central Transportation Corp. reported quarterly earnings of $17.7 million, or $0.34 per diluted share, on revenues of $83.0 million.
  • Anchor BanCorp Wisconsin Inc. reported record earnings of $5.7 million, or $0.58 per diluted share, for the quarter ended Dec. 31.

Sources:

  • "Compaq talks RadioShack into replacing IBM PCs" (The Wall Street Journal)
  • "Harnischfeger to sell 80% of materials unit" (The Milwaukee Journal)
  • "Philip Morris profit dips due to one-time charges" (The New York Times)
  • "Wisconsin Central reports record results" (The Chicago Tribune)
  • "Anchor BanCorp Wisconsin announces record earnings" (The Wisconsin State Journal)