Compaq laptops still get caution flag

Electronic News, June 16, 1997 by Cynthia Bournellis

Compaq would not confirm how many units were recalled for repair, but Gartner Group analyst Ken Dulaney said that findings from talks with 200 Gartner clients since 1Q97 resulted in about 3,000 defective laptops from both the Armada 4100 and LTE 5000 lines. More recent findings have led Gartner to put the Armada 4100s on a "do not buy" status.

Meanwhile, the LTE 5000s have been placed on a "buy with caution" status. According to the Gartner report, a large percentage of the systems either came to customers dead on arrival or were failing within 30 days of receipt. Major problems with the LTE 5000 were defective ROM BIOS software, batteries and hard drives. The LTE 5000 also had quality problems in 1Q96. Compaq had claimed that the percentage of repeat failures occurred when the company changed "misbehaving" batteries and hard drives, for instance. "The power management update in the older-version ROM had manifested itself into some of these problems," said Ted Clark, a Compaq VP, during a phone interview with Electronic News.

Certain Problems

Since the Gartner report, Compaq has addressed certain problems. For example, ROM for the LTE 5000 has been upgraded to version 5.50, which is available to users via Compaq's Web site or by calling Compaq. Users have been recommended to upgrade LTE 5000s with serial numbers J646xxx or lower. "Those customers who have upgraded the ROM are fine," said Mr. Clark. He said, that while Compaq is still making the 150MHz model, the company will eventually replace the LTE series with its new 7700 line, which is based on Pentium processors with MMX technology.

The Armada 4100s were experiencing defects in system boards, power supplies, batteries, docking connectors and keyboards. For instance, the interconnect between the keyboard and the system board had too much carbon coating on it. When the coating got too thick, it affected the keys to the point where the letters would not appear on the monitor when the keys were pressed. Compaq has instituted a lifetime warranty on the keyboard, and has redesigned the keyboard, according to Mr. Clark. Compaq is also redesigned the ROM for the 4100s, with releases beginning sometime this quarter. The Gartner Group advises users to work closely with their Compaq sales reps, resellers and maintenance providers to be kept abreast of the upgrade program. Mr. Clark said problems with the Armada 4100s have not affected customers' acceptance of the product. "We have been seeing an excellent sell-through of 4100 products in the channels. And many corporations have standardized on it."

However, Jim Bartlett, director for worldwide strategy at the IBM PC Co., a Compaq competitor, said he's talked to certain Compaq customers who have "thrown in the towel" on their Armadas due to defects that include cracked cabinets. As a preventive measure, Compaq has put into place short- and long-term changes in design philosophies. "The Armada was over-designed," said industry analyst Jerry Purdy. He noted that the carrying handle that houses extra batteries is a costly option, because users have to figure out how to transfer power from the handle to the unit. In addition, the media bay, which acts as a replicator, forces users to unplug everything from the unit when they want to take their media on the road.

And even though the Armada won a recent award for its mobility attributes, it still gives users more options than they want. "Users want a system that is simpler in design and easier to use," said Mr. Purdy. "I believe the Armada will evolve into something much like Compaq's 1500 line, which is an all-in-one unit."

The Gartner Group's Mr. Dulaney said Compaq may not incorporate this level of innovation in future models, partly because constant upgrades affect the design and test processes. "While Compaq was trying to be innovative, it needed more time to do testing." At the IBM PC Co., 75 percent of the development process involves testing, said Mr. Bartlett. He said adding complexity to a product affects this process and can result in quality problems, because it puts a strain on development teams, manufacturing, resellers and customers. "We are not developing a new product every time a new chip comes out. We develop with forethought in order to accommodate a new CPU."

For example, when IBM's 486-based laptops came out in 1994, they included liquid-cooling heat pipes to support future Pentium processors. "We ride a platform for 24 months and refresh it three times before we bring out a new platform," added Mr. Bartlett, stating that other vendors typically change their notebook offerings beyond core technologies such as CPU, BIOS and bus drivers. "All we want to do is change processor, memory and hard disk drive capacity; otherwise, we have to retool the cabinet, which means more complexity for development team and business partners."

While Compaq's Mr. Clark assures users that the problems have been resolved and is not advising anyone to discard their current systems, the Gartner Group will continue to track the progress Compaq has made in addressing these quality and reliability issues over the next few months before making any changes in status. "Compaq has been very responsive and honest, so we'll wait and see," said Mr. Dulaney.