Compaq announces restructuring moves
Compaq is to retreat from the PC sales war and refocus its business on software and computer services.
The company, which is based in Houston, Texas, is under pressure to cut costs to increase profits.
Compaq intends to phase out its own microprocessors and will instead drive its high-powered computers with chips built by Intel.
Compaq has lost its place as the world's number one PC maker to Dell after being hit by the sharp slowdown in sales in the US.
In April, Compaq announced plans to shed more than 9,000 full-time and part-time jobs and reduce structural costs.
The group is seeking to expand higher margin businesses and escape cut-throat competition in the hardware market, where margins had been shaved ever thinner.
The approach is similar to the path already taken by IBM, which exited PC consumer retailing more than a year ago, avoiding the brunt of the technology spending slump.
Compaq chairman Michael Capellas says: "In the United States, we will focus on acquiring a services company with core strengths in our targeted vertical markets.
"In countries where we have strong high-end share but no critical mass in services, we will look for opportunities to acquire enterprise services companies."
