Science Fair Project Encyclopedia
Compaq Computer Corporation was founded in February 1982 by Rod Canion , Jim Harris and Bill Murto , three senior managers from semiconductor manufacturer Texas Instruments. Each invested $1,000 to form the company. Their first venture capital came from Ben Rosen and Sevin-Rosen partners.
- "COMPAQ" is an acronym for "Compatibility and Quality."
Early products: Compaq makes its mark
Compaq's initial product was the first portable version of an IBM PC compatible personal computer—the Compaq Portable—whose compact form factor inspired the company name. Announced in November 1982 and released in March 1983 at a price of US$3,590, this "luggable" suitcase-sized computer was one of the progenitors of the modern laptop. Although not the first portable computer, it was the first portable IBM compatible PC—indeed, it was the first legal IBM-compatible PC, period—and it proved to be popular. Compaq sold 53,000 units in the first year and set revenue records for American businesses in its first three years of operation.
Compaq's efforts were possible because IBM had used mostly "off the shelf" parts for their PC, and because Microsoft had kept the right to license the operating system to other computer manufacturers. The only part which had to be copied was the BIOS, which Compaq did legally by reverse-engineering it at a cost of $1 million. Numerous other companies soon followed their lead.
Compaq further cemented its place of significance in the industry when, in 1987, they introduced the first PC based on Intel Corp's new 80386 microprocessor, the first 32-bit processor in the x86 line. By introducing a PC with a processor IBM had chosen, at the time, not to use, Compaq established what had been known disparagingly as the "PC clone" business as a force for innovation in the PC business.
Compaq's early machines were known for the quality of their engineering and their documentation.
The 90s: retail PCs; Acquisitions
Compaq entered the retail computer market in the early 1990s with its Presario line, and was one of the first manufacturers in the mid-1990s to experiment with PCs at a retail price just below US$1,000. In order to maintain the price points it wanted, Compaq became the first first-tier computer manufacturer to utilize CPUs from AMD and Cyrix. The price war resulting from Compaq's actions ultimately drove numerous competitors, most notably IBM and Packard Bell, from the marketplace.
In 1998, Compaq acquired Digital Equipment Corporation, the leading company in the previous generation of computing during the 1970s and early 1980s. This acquisition made Compaq, at the time, the world's second largest computer maker in the world in terms of revenue.
The merger with Hewlett-Packard
In 2002, Compaq engaged in a bitterly contested merger with Hewlett-Packard. Numerous large HP shareholders, including Walter Hewlett , publicly opposed the deal. CEO Michael Capellas left the company soon after, leaving HP CEO Carly Fiorina in charge of the combined company.
CEO Carly Fiorina helmed Compaq for nearly three years after Capellas left. During that time, HP laid off thousands of former Compaq employees, its stock price generally declined, profits did not perk up, and it continued to lose market share to its number one competitor, Dell. Facing dismissal from a hostile Board of Directors, Fiorina opted to leave in February 2005 before the board could fire her. Many Compaq products were re-branded with the HP nameplate, while the Compaq brand remained on other product lines.
Two sports stadiums were named after the company. The Compaq Center, of Houston, Texas, formerly The Summit, lost its sports teams to the Toyota Center. The building will become the new home of Lakewood Church, one of the largest Protestant congregations in the United States. The San Jose Compaq Center, of San Jose, California, was renamed the HP Pavilion.
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