Thursday, May 10, 2001

Compaq CEO touts
virtues of wireless
Internet access

Capellas tells UH crowd that
a lack of a global standard will
slow wireless technology's progress

By Tim Ruel

Compaq Computer Corp. is so confident in the future of wireless Internet access that the company is inserting the technology into its next laptop, the company's chairman and CEO revealed in a speech at the University of Hawaii.

"We think the wireless world is huge," Michael Capellas told an audience of more than 100 students yesterday at the UH campus Art Auditorium.

Compaq is one of the top sponsors of this week's annual meeting of the Asian Development Bank at the Hawaii Convention Center. Compaq also held a press conference at the meeting yesterday to announce it had provided iPaq Pocket personal computers to top delegates of the bank.

Earlier in the day, in his speech at UH, Capellas said one problem facing the development of wireless Internet is different regions -- Europe, Asia, the Americas -- are adopting the technology in different stages.

In the third world, countries are immediately adopting wireless service because their buildings and structures can't support the wired version. The problem is that a lack of a unified global standard will slow the progress of wireless advances, Capellas said.

On top of that, Compaq is finding it difficult to access certain local markets in Asia, Capellas said.

The problem is not the logistics or the company's brand. It's tariffs, or taxes on foreign goods.

Capellas ought to know the international situation. He's worked in six foreign countries over the years and has traveled almost everywhere, he says. Compaq does 10 percent of its business in Asia, excluding Japan, said Capellas, who joined the company as chief information officer in August 1998.

In his speech, Capellas acknowledged the recent upset in the broad market of information technology companies.

Two weeks ago, publicly traded Compaq reported that its first-quarter profit fell 21 percent to $200 million from $252 million in the year-earlier quarter, prompting the company to increase layoffs to 10 percent of its work force.

In the first quarter, sales of its consumer and commercial computers fell 7 percent to $4.37 billion from $4.7 billion.

For starters, the company said it has entered a ruthless price war with competitors Dell Computer Corp. and Hewlett-Packard Co.

Also, today's economic conditions are toughest Capellas has seen in the past 10 to 15 years, he said. The good news is that the dot-com bubble has burst.

"What happened was people built a lot of foundations on quicksand," or ideas that didn't have a clear business model, he said.

Although capital will continue to be scarce for the next three to six months, there's plenty of money waiting on the sidelines, Capellas said.

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