Regional retailers react to HP/Compact merger

Combination of core brands will be the key to success for the merged Hewlett-Packard/Compaq

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By  Mark Sutton Published  September 6, 2001

Retailers in the Middle East have been giving their reaction to the news that Hewlett-Packard is to buy Compaq. HP chairman and chief executive Carly Fiorina said in an Q&A session with journalists on Tuesday that the HP brand would survive, but certain Compaq sub-brands would exist under that.

“We have done a fairly comprehensive business plan around this combination [of brands]... we knew we had to be clear-eyed and sober about how to get this done. It will be important for us to spend the right amount of money to transition these brands effectively, to position the combination effectively,” Fiorina said.

There is considerable overlap between the retail product ranges of the two companies, notable in PDAs, desktops and notebooks, a situation which is further complicated by the relative availability and success of different brands in the Middle East. HP’s retail PC range, has not been hugely successful in the region, while Compaq’s.

The combination of the two brands could prove to be very powerful, according to Boudi Ghandour, vice president of products and procurement for Middle East retailer CompuMe. “If you can bundle an HP PC with an HP printer, a scanner, that is a very strong combination,” he said. “HP have done very well with the Pavilion range of PCs in the US, but it has never been released here; Compaq’s Presario has been the leader, if they can bring the Pavilion here, or combine the HP brand with the Presario, I think it will be very succesful.

Ghandour said that the merger would not mean that there would be no choice for consumers however, despite the demise of Gateway and the lack of presence of Dell. “Compaq has always been a strong brand, but IBM has started to wake up on the retail side, HP notebooks have been doing well, they have all woken up to the consumer market, even Intel now as a retail channel manager. CompuMe still has Compaq, Acer, IBM, Creative, and our own brand, so there will still be enough to choose from.”

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