Compaq Invigorates Value of Armada Brand with New Leasing Program, Aggressive Price Reductions

Business Wire, Oct 14, 1997

HOUSTON--(BUSINESS WIRE)--Oct. 14, 1997--In a move aimed at giving customers maximum price/performance value in notebook computing during the popular end-of-year buying season, Compaq Computer Corporation (NYSE:CPQ) today announced a new Armada 1500 notebook leasing program through Compaq's reseller channel, as well as sweeping U.S. price reductions throughout the Armada notebook computer line.

The Armada 1500 Leasing Program - the first promotional program through Compaq Capital Corporation - is targeted at small- and medium-sized businesses wanting to obtain a Compaq notebook with the flexibility and affordability found through leasing. This leasing promotion is designed to offer the utmost in simplicity, speed and value in obtaining a notebook computer. For those computer users who need an easy-to-use notebook PC, Compaq now offers the Armada 1500 - with an industry-leading all-in-one design - at a very affordable monthly leased price.

In addition, Compaq reduced the prices of nearly every Compaq Armada notebook computer to offer the best mobile computing values available today.

"From the affordable Armada 1500 line of portables offering both power and simplicity, to the Armada 7000 family for users demanding outstanding performance and desktop expansion, Compaq provides a portable solution for virtually every type of customer," said Jim Schraith, Vice President, Compaq North America. "With the announcement of this new leasing program and these extremely aggressive price cuts, there's never been a better time or an easier way to acquire a Compaq Armada notebook."

The Armada 1500 Leasing Program

Starting October 20, Compaq will begin offering a new Armada 1500 leasing option through Compaq Capital Corporation, the company's leasing arm. Compaq launched Compaq Capital earlier this year to provide customers with a single financing source for all their information technology needs during the ownership cycle. From product acquisition to asset management, technology updating and disposal assistance, Compaq Capital helps customers lower the cost of technology ownership. The current Armada 1500 Leasing Program includes all models of the Armada 1500, with prices starting at $70 per month for the Armada 1530DM(a).

"Leasing has become the preferred method of acquisition for corporate notebook users because it provides companies and users with the ability to manage the technology life cycle of their equipment," said Irv Rothman, President of Compaq Capital Corporation. "Most businesses like the flexibility to upgrade or change their notebook units to suit their individual needs, rather than having to commit to a certain model they may outgrow over time."

Leasing presents a number of benefits over a typical purchase:

--Customers profit from the use of computer equipment while avoiding the risks of technology obsolescence. Customers can upgrade or add-on to their PCs as their equipment needs change.

--No down payment is needed. Cash and lines of credit are freed for other more profitable uses. Fixed monthly payments make it easier to forecast expenses.

--Customers can get more with a lease. Monthly lease payments are typically lower than purchase installments, even when you include more features in a system.

--Generally, customers can write off monthly lease payments as tax deductible.

--With a lease, customers can finance all of their technology acquisition costs including software, training, installation and other soft costs. Everything can be bundled into one single affordable monthly payment.

At the end of the lease, customers can return the equipment to Compaq Capital with no further obligation, renew or extend the lease for a fixed period of time at a specific rate, or purchase the equipment at fair market value.

Leasing also represents an ideal opportunity for Compaq resellers. Resellers are immediately reimbursed by Compaq for lease acquisitions, and are able to reduce administrative paperwork by leaving the task to Compaq. Leasing also gives resellers the opportunity to increase their margins by selling more products, and by providing "bundled" solutions with additional software, accessories and services.

Customers who lease an Armada 1500 model by December 31, 1997 can take advantage of the following aggressive leasing rates(b):

Model           36 Month Lease          24 Month Lease

Armada 1530     $70 per month           $96 per month
Armada 1540     $78 per month           $110 per month
Armada 1550     $79 per month           $117 per month
Armada 1580     $89 per month           $129 per month
Armada 1590     $99 per month           $139 per month

The Armada 7000 series of products come standard with high performance graphics, PremierSound stereo display-mounted speakers, hardware wavetable support and CardBus slots with zoom video interface capabilities. Most models also include a 33.6Kbps internal telephony modem - the fastest internal modem available in the industry today - which is upgradeable to the K56 flex protocol in the future(f).