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Compaq shortage in business PC

The company is clearing the way for new Deskpro PCs--leaving many business customers empty-handed in the meantime.

Forget trying to get some of Compaq's most popular business PCs.

Severe shortages of Compaq's (CPQ) popular flagship Deskpro desktop computers have made many models nearly impossible to get. This is occuring against a backdrop of surging shipments for the world's largest PC maker.

The demand for Deskpros is always high. But the real cause of the shortage, according to Compaq resellers, is Compaq's plan to upgrade the Deskpro line next month with new chips that use Intel's (INTC) MMX multimedia technology.

As the PC vendor ramps up to ship the new models, it is trying to limit inventories of the old boxes so that it doesn't end up with a lot of unwanted machines. But this is leaving a lot of business users empty-handed in the meantime.

Currently, the Deskpro 4000 with 166-MHz or 200-MHz Pentium microprocessors are the most difficult to get, said resellers. One large computer company in the Midwest said that orders on the high-end 4000s have remained unfulfilled since April.

"The 4000s are impossible to get," said another corporate reseller.

Deskpro 2000 and 6000 models are a little easier to obtain, but typically can only be found in small lots.

Industry insiders say shortages often occur prior to model upgrades.

Kevin Hause, an analyst at International Data Corporation, explained that vendors generally strive to have as little of the old line left as possible when the new line is scheduled to ship. Shortages occur when vendors underestimate demand. "When you come out with a new line, the less old product, the better," he said.

Compaq will next month release new versions of the Deskpro 2000, 4000, and 6000 models with Pentium and Pentium II processors equipped with MMX, according to sources familiar with the company's plans. Only a few of the Deskpro 4000 and 6000 computers available now use Pentium IIs or Pentiums with MMX. Most Deskpros instead have ordinary Pentium processors that range in speed from 133 to 200 MHz.

Compaq could not be reached for comment on the shortages or next month's upgrades.

Compaq has confirmed previously, however, that it will unveil build-to-order models of the Deskpro 2000 and 4000 in July.

Build-to-order computers have equivalent features, but may cost less because they are built to match a particular order. The build-to-order process is expected to lower Compaq's costs and allow the company to better compete against mail order companies such as Dell (DELL).

Other than the shortage of Deskpros, Compaq is having a banner year so far. In the first half of the year, the Houston-based computing giant has shipped 1.5 million computers, with 856,000 of those going out the door in the second quarter, according to market research firm Computer Intelligence.