Compaq adds to price war fears after Apple head goes

Still digesting the sudden ousting late on Wednesday of Apple's chief executive, Gil Amelio, the US computer sector was yesterday pondering additional turmoil with signs gathering of a new and possibly bloody price- cutting war.

Most importantly, Compaq Computer, the largest manufacturer of PCs in America, announced price cuts of up to 22 per cent on many of its personal computers for corporate customers. The move came one day after Hewlett- Packard slashed prices by up to 24 per cent.

Compaq, which is struggling to stave off strong new competition from Dell, also said yesterday that its second-quarter earnings had slipped by 20 per cent. The poor figures were largely attributed to a one-off charge related to the company's recent acquisition of Microcom.

Even though the Compaq figures were roughly in line with Wall Street expectations, worries about the company led to a sell-off of its stocks. Shares in Compaq were off by $2.50 to $118.50 in early trading in New York.

Shares of Apple computer were also under pressure, dropping to a dismal $13, as investors pondered whether the dismissal of Mr Amelio by the board implied that the troubled PC pioneer may be doomed in the longer run. Its latest figures will be published next week and are expected to be grim.

Apple's co-founder, Steve Wozniak, was among a chorus of voices yesterday urging the company to replace Mr Amelio, who took the helm in February 1996, with a figure more focused on customer relations. "I just hope we get somebody that's really good at judging customers and where they are now and in the future," Mr Wozniak remarked.

Mr Amelio is the third Apple chief executive to be forced out in just four years. Similar fates were visited upon John Sculley in 1993 and Michael Spindler in 1996. The company has seen its market share shrink rapidly while losses in the last 18 months have grown to $1.5bn (pounds 888m).

Compaq, meanwhile, is increasingly threatened by Dell and also Gateway 2000 because both these rivals rely on direct sales to customers, thus cutting out distributors and retailers.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test