HP and Compaq Union

Great minds think alike? We’re not quite sure, but either way Hewlett Packard is buying Compaq for a massive $US25 billion stock deal, according to the New York Times as a move designed to combat shrinking PC sales world wide.

So far,

Great minds think alike? We're not quite sure, but either way Hewlett Packard is buying Compaq for a massive $US25 billion stock deal, according to the New York Times as a move designed to combat shrinking PC sales world wide.

So far, representatives from both companies have declined to comment on what the buy out means for the computing industry as a whole. However, you can be sure that this will mean increased job cuts over and above the amount previously scheduled to occur, as Hewlett Packard first asses's Compaq's assets and personnel, and then performs a massive rationalisation on both companies in order to reduce duality of function and cost overheads.

How does this affect Atomicans? Until Hewlett Packard release more details on the transaction, possible effects are hazy at best. Certainly, this is a major blow after Gateway's earlier announcement regarding the closure of its entire Pacific Rim operations. Two major PC retailers out of the game in less than a fortnight, with the slowing demand for PCs playing a part in both moves. Could we be heading towards a monopoly or duopoly based industry, where one or two huge players fight it out in the enterprise market whilst little mum and dad, corner computer stores compete against the massive economies of scale available to the few behemoth computer companies – all for a little piece of the home consumer pie? We don't know. Certainly we hope not, as competition is always a good thing.

Luckily, as the majority of Atomicans shun pre-built brand name systems in favour of buying their computers piece by piece, this move should not have any direct ramifications when we next choose to upgrade our beloved beige boxes. But for the industry as a whole? Well that's an entirely different story.