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THE CUTTING EDGE | HEARD ON THE BEAT

CompUSA Launches Its Own Line of PCs

September 22, 1997|GREG MILLER

The already crowded personal computer industry added yet another brand name last week when CompUSA, the computer retailing giant, launched its own line of PCs.

The CompUSA machines won't be available in the company's 130 stores, which already carry numerous brands including Compaq and Apple. Instead, the new models are to be sold through catalogs and over the phone as the retailer's response to the growing threat of direct-sales giants Dell Computer and Gateway 2000.

"They haven't taken business from us," said Jim Halpin, chief executive of Dallas-based CompUSA. "They just haven't allowed us to grow as fast."

But taking on Dell and Gateway is no easy task. The companies have dramatically altered the industry landscape, forcing giants such as Compaq and IBM to streamline their production and inventory schemes to compete.

The emergence of the direct-sales companies has also put pressure on retailers, said Scott Miller, an analyst at Dataquest in San Jose.

"Dell, Gateway and Micron have taken away the option of carrying a lot of inventory," Miller said, pointing out that deep inventories and broad selection were formerly considered retailers' strengths.

Halpin said CompUSA can offer better service and support because of its network of stores. Consumers can return problem machines to the stores or pay to have the chain's local specialists help with installation.

The CompUSA computers are being built by three contract manufacturers, Halpin said.

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