Compaq Computer has partnered up with Schaefer IT Logistics in Germany in a a bid to kickstart its flagging sales in the German PC market.
Compaq has turned over the production of its home PC line in Germany to Schaefer, a small Dresden manufacturer, in a desperate bid to bring down the price of its PCs to the base level German consumer's demand.
Compaq, which has only two per cent of the German home PC market, ranking it number 10 in the supplier chart, is hoping that the production strategy will boost its position to 10 per cent, which is around its average market share for other European countries.
Under the agreement Schaefer will produce several thousand home PCs to specifications demanded by German consumers.
Analysts believe that Compaq?s strategy will help it to keep inventory and logistics costs down, source the cheapest components in the marketplace and cut price tags to satsify consumer expectations.
Unlike those in other European countries, German consumers want the fastest, highest specification PC available, but they are not willing to pay for the bells and whistles. This has resulted in almost 80 per cent of the German PC makers turning into assemblers - small companies that build batches of systems to a certain configuration with the lowest price point possible and push them out through discount chains around Germany.
Analysts believe that Compaq will have its work cut out competing with the assemblers on pricing and maintaining brand kudos.
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