PHOENIX - Imagine buying a "Formula One" racing car, or even a "mere" Porsche, and discovering that its maximum speed is only 50 MPH. What would you do?

(a) Return it to the dealer you bought it from and ask for a full refund;

(b) Crash it through the glass windows of the dealer's showroom;

(c) Rejoice that you'll almost certainly never get a speeding ticket;

(d) Upgrade to a new jet engine;

(e) Cry softly;

(f) Bitch to the CEO of the underpowered car maker.

Whatever your multiple question choice(s) are, you'd probably feel cheated. Or mugged. Especially if you actually bought such a lemon, rather than merely test-drove it. Cheated and mugged is exactly how this first-time Compaq customer felt after his Internet experience with the Houston PC maker's top-of-the-line "screamer," the 400 MHz-powered Presario 5630 with a 56K Rockwell modem. By Compaq's false or misleading advertising.

Which is why my choice is (f) - bitching to Eckhard Pfeiffer, Compaq's CEO and reportedly a fast car aficionado (a Porsche owner), who is getting a "personally autographed" complimentary copy of this Annex Research report. Magnified, of course, by the power of the Internet and the media.

   He Bitched!

This appears to be especially appropriate considering how fastidious a Porsche customer Pfeiffer seems to be. When his all-wheel-drive turbo Porsche suffered a small scratch while in dealer's care, the Compaq's chief demanded a new car, according to a Jan. 5, 1998 Wall Street Journal report. And got it, after bitching to the Porsche CEO himself.

"So how about it, Pfeiffer? Your Presario 5630 arrived at my office with a lot more 'damage' than just a scratch. A label on which contained nothing less than FALSE OR MISLEADING ADVERTISING, for example! Or do I also need to scratch my Compaq 'Porsche' before it'll run at its advertised speed?"

The Gory Details...

And now, some gory details... The first time we tried to upgrade our (on-y2k compliant) IBM desktop was in early May of this year. No luck. Or at least we didn't find anything on the retail store shelves that would justify the asking prices.

We tried again in July; over the 4th of July weekend, to be precise. And came away disappointed again. Although some Phoenix computer stores had just received the latest Compaq top-of-the-line Presario 5630 demo models, and despite the fact that this Pentium II 400 MHz-powered system was indeed impressive with all its advertised features, we were turned off by the fact that it ONLY came with the preloaded Windows 98 software (see Appendix A - this writer's July 10 letter to the editor of the Wall Street Journal).

But with a clock ticking (in more ways than just the y2k), we caved in and walked into the Scottsdale CompUSA store on Aug. 1.

"Can I help you?" a friendly, young store clerk asked us. (ALL store clerks in computer stores seem to be the same - young!? Whatever happened to "equal opportunity" employment? Just kidding...).

"Well, we'd like to buy that system," I replied, pointing to the display model of Compaq's Presario 5630.

"You'd like to buy it?" the clerk asked, sounding astounded.

"Why not? Is there something wrong with it?"

"No, no, it's just that I haven't had a chance to tell you anything about it."

"That's okay. We've already done our research."

As the salesman rang up the sale he looked positively depressed.

"Let me tell you about our five-year warranty and service," he livened up at the chance to actually earn at least a part of his sales commission.

I let him.

"Our service is much better than Compaq's," he disparaged fearlessly against a vendor whose product he was selling, evidently unconcerned that a customer may not want to have his precious "Porsche" being serviced by a local Exxon station.

"That wasn't very swift," I made a mental note to mark this salesman down as a former (very former) sales manager. "They don't make them (salesmen) anymore the was they used to," I thought silently.

But in sales, being lucky is more important than smart. That hasn't changed since my days in sales or sales management, a decade or two ago.

As it turned out, this salesman was lucky. For, his customer had already discovered through personal experience that a "blue chip" service in the PC industry is a mere advertising gimmick; that a local "Exxon" can often be of more value to a customer than a high-falutin' "blue chip" vendor who actually "manufactured" the PC (actually, merely assembled the parts made by other manufacturers). And stuck on it the logo worth hundreds of millions in advertising dollars.

"Okay, I'll take it," I replied to the salesman's pitch for CompUSA's five-year extended warranty and service.

* * *

Within a couple of weeks or so, I was up and running with nearly all my (numerous) applications. Thanks to a local "Exxon"-type engineer whom I asked to break in my new "Porsche." The "fateful" day for the switch from IBM to Compaq came and went uneventfully. This 30-year veteran of the computer industry, and the first-time Compaq buyer, has never before seen such a smooth upgrade - a credit both to Compaq, and to my local "Exxon" engineer.

Until I started using my new "Porsche" on the Internet, that is... When its wheels came off. Sort of...

I've noticed that the time to log into my "POP" (Post Office Protocol) server was much longer with Compaq Presario's 56K modem than it was before, when I was running the IBM system at only a 28.8K speed. Sometimes, my e-mail software would even time out before logging into the POP server.

My first suspicion was that the fault lay with our "Exxon"-type Internet Service Provider (ISP) for domain- hosting, Allston Systems of Cambridge, MA. Wrong! I got some of the best advice from them. Including instructions on how to measure the actual time delays on the Internet "super-highway" before my "Porsche" arrives at the "post office" to pick up my e-mail.

Fast-forwarding through DAYS (!) of tests involving four of our PCs and laptops, and three of our various US West phone lines, the upshot of the ordeal was that our Compaq "Porsche" was running slower than even the IBM "family sedan" I used to drive before. Our Internet access provider's (IBM) support staff actually measured our connection speed at only 19.2K, instead of the 56K which Compaq's label on the front of my "Porsche" still displays, and which all of Compaq's other literature also asserted.

As for my old, beat-up, 28.8K, non y2k-compliant, IBM "family sedan," it actually performed at about twice the speed of the Compaq's new 56K "screamer."

As a result, the only thing "screaming" about Compaq's "screamer" is this anguished and gouged customer.

"How much more embarrassing does it get, Mr. Pfeiffer? An IBM 1996 'family sedan' running circles around your new, shiny 1998 'Porsche'?

And allow me, please, to tell you how much more embarrassing it gets, before you answer the above question.

An IBM 1996 laptop, fitted with a Motorola 56K modem, actually ran circles around your new, shiny 1998 'Porsche.' The IBM laptop's/Motorola modem's actual Internet connection speed was almost five times greater than that of my new Compaq's "Porsche."

"How does that compare with the scratch which your shiny, new 'Porsche' allegedly got 'while in dealer's care'?"

Presario Pressed into Service Too Soon?

But even the above blemish is not the whole story. For, the real "scratch" here may be one of a deliberate Compaq deception. Was this Compaq "Porsche" pressed into service too soon, before it was properly test and outfitted? We'll leave the Federal Trade Commission to answer that, which is also receiving a "personally autographed" copy of this Annex Bulletin.

Not only because none of the new Presario 5630 buyers would have likely found out they got a lemon unless they had three or four other systems to compare it to, as we ended up doing. But also because Stephen Goldberg, an IBM Global Network engineer worth his weight in gold when it comes to technical support, discovered that Compaq's Web site contained the following notice, dated July 28, three days before we had purchased our Compaq PC

---------------

Rockwell HCF 56K PCI modem V.90 upgrade

Models affected

...5630...

---------------

Bingo! So Compaq seems to have known that it had shipped a sub-par unit at a par price and performance. And was now trying to remedy the problem - retroactively. And no, we never received any such notice from Compaq directly. Nor from the CompUSA store. The fact that we learned about it was strictly due to the initiative of that IBM engineer who was trying to help us figure out why our Internet access times have deteriorated after we had supposedly "upgraded" our modem speed.

This Compaq Web site notice urged its customers to "click on the SoftPaq number below to download the software." Lo and behold after we did it, and had installed the upgrade, the access times to our POP server improved by about a 50% (they dropped from about 700 ms to 800 ms per Internet "hop," to about 300 ms to 400 ms).

SUMMARY

My PC "Porsche" was delivered to me by its manufacturer (Compaq) and reseller (CompUSA) with a sub-standard, and certainly sub-advertised modem speed. And this appears to have been done knowingly, possibly in a rush to market (see Rick Thoman's remarks about that at the end of this report - an excerpt from Annex Bulletin 95-23, 3/23/95). Witness the July 28 notice at Compaq's Web site. Yet there was never a recall announnced, nor any other notice sent to the buyers of such deficient products, as far as we know. I have certainly never received anything of the kind either from Compaq, or from CompUSA.

If such a despicable practice doesn't break some of the U.S. fair trading practice laws, why do we have any such laws at all? What chance would a novice Internet user have had to discover that he/she had been duped by Compaq and/or CompUSA? Slim to none. They would have probably gone on thinking that they were cruising the Net at 56K, when their actual speed was only 19.2K. I certainly did, at first anyway. Until experience and common sense suggested otherwise.

To make sure I wasn't off-base before spouting off about it, I had one of Annex Research staff call the CompUSA store in Scottsdale and make a formal complaint about the deficient modem/speed which they had sold us. The CompUSA's explanation was, "this was due to your slow ISP (server), and your slow phone lines (US West, by the way)."

In other words, they were either clueless as to the modem problem, or were trying merely to pass the buck.

Finally, this writer personally talked this week to John Begler, a Compaq Presario product support staffer, and explained to him our modem woes, as well as who it was that experienced them, i.e., both an IT industry consultant and a recent Compaq buyer. Begler also pleaded total ignorance about this problem.

"I've never heard of any such problems," he said.

"Well, now that you have," I said, "What are you going to do about it?"

"Guess I should report it to my supervisor?," he said, sounding uncertain even about that.

Duh... "Why don't you do that?" I suggested.

P.S. No offence meant, of course, to the actual Porsche car makers. We only used one of their demanding customers (Pfeiffer) as a case in point to illustrate by how much the real Porsche is ahead of its copycat admirer - Compaq. If the real Porsche had shipped a deficient product, chances are its customers would have read about a recall in the business media.

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Rick Thoman, former IBM CFO, now the CEO of Xerox, was running the IBM PC Division when he made the following remark

"...Thoman also said that in the PC business, 'speed to market is absolutely critical.'

As much as 50% of the gross profit can be lost if a product is only three months late, Thoman said. That's not surprising considering that the PC product cycles have become 12-15 months."

July 10, 1998

Ned Crabb, Letters Editor

THE WALL STREET JOURNAL

New York, NY

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Subject A letter to the editor Re. - "Your overlooked something," (WSJ letters, 7/10/98)

Dear Ned,

Get real, Mr. Zuck! ("You overlooked something," WSJ letters, Jonathan Zuck, 7/10/98). You say Microsoft's dominance of the PC industry is due to its offering a superior product which consumers demand. Hogwash! Microsoft's dominance of the PC industry is due to its brazen coercion and abuse of market power - precisely the kind of corporate behavior which the antitrust laws are designed to curtail. Microsoft's idea of a free market is one in which this boorish predator is allowed to freely abuse its competitors.

Let me give you a real life example...

The weekend of July 4th, my college-age daughter and I went shopping for a new PC. We scoured all sorts of retail stores in the metropolitan Phoenix area. Yet, we could not find a single new PC - made either by Compaq, Hewlett-Packard or even IBM - which did not have the Windows 98 already preloaded. You say the "consumers demand it." Hogwash, again! My daughter and I are consumers. We didn't necessarily want Windows 98. But the Microsoft-coerced PC manufacturers gave us no choice. It was either Windows 98 or nothing. So we chose nothing... (for the time being).

And that's free market competition? Frankly, that's more like a world in which 90% of all cars - whether made by GM, Ford, Chrysler, Toyota, Honda, Nissan, Volkswagen, Opel, Renault, Citroen or... - were to use the same engine. The buyer would only get to choose the color, the shape or the interior of the car, but not its power or engine reliability.

If that's "innovation" and free market competition, which is what Mr. Zuck and Microsoft claim, you can have it. Especially considering that, if my current PC's Windows engine were to power an aircraft, I would have been killed by its crashes hundreds of times by now.

Regrettable as any government intervention is in business and commerce, in order for the American consumers to live, Microsoft's Windows monopoly needs to die. Or at least be harnessed and made harmless. Which is what the Justice Department is trying to do. Anything else would be the lawmen siding with muggers.