Compaq Unveils Its Most Powerful Desktop Computer

Compaq Computer on Monday introduced its most powerful desktop computer to date to expand its share of the multi-user market dominated by mini-mainframes. The firm said foreign sales would soon be half of its revenue.

At a news conference, the company introduced its Deskpro 386/33, claiming its 35% performance increase over previous desktops made it “the most powerful and expandable desktop personal computer in the world” at a top price of $17,999.

Using a new microprocessor chip, introduced by Intel Corp. only last month, Compaq President Rod Canion said the new computer is designed for such applications as computer-aided engineering design, financial modeling and as a “file server” in multi-user networks.

“It puts Compaq in the mini-computer business,” said Michele Preston, an analyst with New York’s Salomon Bros.

“Historically, personal computers have been used by one person with one computer. Now, the move is toward networking personal computers together,” using a file server as the information-sharing base.

To date, mini-mainframes have dominated the network and multi-user system markets. Compaq is leading the invasion of this market with more powerful desktops. “IBM is not,” Preston said.

The more powerful desktops are “blurring” the distinction between personal computers, work stations connected to large mainframe computers and mini-computers, she said.

In the first three months of this year, Canion said, Compaq had moved ahead of Apple and Olivetti as the No. 2 seller of personal computers in Europe.

He said Compaq would announce today the establishment of a subsidiary in Denmark, which would be in addition to the subsidiary set up in Norway earlier this year.

“International sales accounted for almost 40% of our business last year. . . . We anticipate that international sales will account for up to 50% of our total business in the next few years,” Canion said.

He said the company is reorganizing its management to take advantage of foreign growth, noting that it was only five years ago that Compaq established subsidiaries in West Germany, Britain and France.

Compaq now has manufacturing facilities in Singapore and Scotland as well as at its Houston headquarters. A South American dealer network has been set up in Chile, Venezuela and Colombia, he said.

In a surprise move in February, Compaq canceled its dealer agreement with Businessland Inc. of San Jose, an arrangement worth about $150 million last year.

Canion was asked if Compaq would move more toward direct sales as it introduces more sophisticated computers.

“As the dealer channels evolve . . . we’re absolutely convinced that the dealer channel will be capable of selling this kind of system and its evolutionary successors,” Canion replied.