Wednesday, September 5, 2001

HP-Compaq merger
needs to be scrutinized

The issue: Hewlett-Packard and Compaq
announced plans to merge, as the computer
industry copes with decreased sales.

CONSUMERS have fared well recently as prices of computers have gone steadily down, but that trend may be temporary. Hewlett-Packard Co.'s $25 billion acquisition of Compaq Computer Corp. amounts to a major consolidation in the personal computer industry, potentially ending the PC price wars. Since the merger would most likely be a setback for consumers, a thorough review by government regulators is needed to determine whether it would conform with antitrust laws.

The merger would produce a company with a total revenue still slightly less than that of computer industry leader IBM. However, Hewlett-Packard and Compaq account for an estimated 70 percent of the personal computer market and an even greater percentage of those bought in stores, since IBM, Gateway and Dell Computer, their main competitors, market their systems only by the Internet and telephone. Other companies, such as Sony and eMachines, are distant players in the desktop PC market.

Price competition has been good to consumers but has taken a toll on computer manufacturers. Hewlett-Packard's net income fell 82 percent in the nine months through July. Compaq suffered a net loss of $201 million for the six months through June.

Some experts say the falling prices of personal computer components may facilitate entry into the PC market. However, it is not a very enticing market for new companies to enter or existing players to expand. The industry is experiencing its first decline in sales in 15 years, expected to be down 10 percent this year in the United States. Hewlett-Packard and Compaq may have concluded that the only way to become profitable is to dominate the market, eliminate competition and then raise prices.

That domination could put the merged company in a position to control the next generation of computer technology. Many industry experts envision a reversal of the migration of computing power to home and office desktops. They foresee the emergence of an Internet-based system using powerful computers known as servers that will provide power to computers and cellular telephones around the world. The battle could be over which company makes those servers, unless Hewlett-Packard and Compaq win by default.

Answers to these questions need to be provided to U.S. authorities, providing the Bush administration its first real test of how it will deal with threats to competition in the marketplace.

Racism conference fails
in face of its own bigotry

The issue: Secretary of State Colin L. Powell
has withdrawn the U.S. delegation from a U.N.
conference on racism held in South Africa.

Sometimes in our lives as individual citizens, or as a state, or as a nation, we must stand up to be counted. Secretary of State Powell did so when he pulled the American delegation out of the United Nations conference on racism being held in Durban, South Africa. No soft-soap, no weaselly compromise, no lukewarm accommodation but rather a statement that went to the heart of the matter: "You do not combat racism by conferences that produce declarations containing hateful language."

The consequences of the American withdrawal are likely to be far reaching, even profound, as it underscores the takeover of the racist issue by those who are themselves bitterly racist:

>> No matter what the U.N. conference declares, the peace process in the Middle East has been set back as the hide has been torn off whatever thin cover remained over the Arab obsession with driving Israel into the sea.

>> The public reputation of Arab nations seen by Americans, who are generally pro-Israel to begin with, has been badly damaged and will take years to rebuild.

>> Respect for the United Nations, already a target for suspicion among a widening segment of Americans, has been weakened because it permitted the Durban conference to disintegrate.

>> The cause of African Americans and other minorities to gain the full benefits of citizenship may have been harmed because those who would deny them have been given a nasty new weapon.

The South African government, evidently aware of how the American departure reflected on South Africa as host of the conference, suggested that the American withdrawal was "merely a red herring demonstrating an unwillingness to confront the real issues posed by racism in the U.S.A. and globally."

The history of racism in America must be acknowledged. African Americans, Asian Americans, native or Indian Americans, Hawaiian Americans, Latino Americans, Jewish Americans, Irish Americans, Eastern-European Americans -- all "hyphenated" Americans -- have felt its lash.

Even so, it would seem reasonable to ask whether any other nation has done as well in excising the cancer of racism as America. Probably not, although that is no reason for complacency. For evidence, not to say irony, note that the secretary of state, the first among equals in the president's cabinet and the one who gave the order to withdraw from the conference on racism, is the first African American to hold that distinguished office.

Published by Oahu Publications Inc., a subsidiary of Black Press.

Don Kendall, President

John Flanagan, publisher and editor in chief 529-4748;
Frank Bridgewater, managing editor 529-4791;
Michael Rovner,
assistant managing editor 529-4768;
Lucy Young-Oda, assistant managing editor 529-4762;

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