Compaq Sells 2 Millionth iPaq

Compaq Computer

While stopping short of announcing the iPaq would be a surviving brand in a merger with HP--both companies have refused to spell out which product lines would survive after their pending $21 billion merger--a top Compaq executive suggested the writing was on the wall.

"There are a lot of subtle messages here, and of course some not-so-subtle messages," said Mike Winkler, Compaq's executive vice president of global business units. "One of the most important ones is celebrating our 2 millionth iPaq being sold."

And, Winkler said, momentum appears to be building: The second million were sold during the past 10 months.

While Winkler declined to say if any decisions had been made that the iPaq would survive as the franchise PDA product of the newly merged company over the HP Jornada handheld platform, he did not discourage speculation that the iPaq announcement was a clear indication a decision had been made.

The merger, which HP said had been approved during last month's shareholders' vote, is awaiting a ruling on legal challenges to the process by dissident HP director Walter Hewlett.

The Compaq handheld platform, which is barely two years old, will likely continue to maintain a firm pricing level while PC pricing is under pressure.

"We have had a black and white version [of the iPaq at a significantly lower price," Winkler said. "We found that the application-intensive market we're going after wants the features and is willing to pay for it. That's turning out to be the predominant market. That's good news--that's not a commodity market. There's margin available for all of us, unlike some of the PCs in the current market."

Winkler also said that supply issues, which plagued Compaq's production of iPaqs early in the life of the handheld platform, have been largely resolved.