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PC maker needs to sort out differences with Compaq while rivals attempt to exploit turmoil

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Hewlett-Packard's takeover of Compaq Computer may flourish in the long term, but it will face rocky times over the next few months as the two computer makers pound out their differences and rivals attempt to muscle in on their turf.

The news of the HP-Compaq deal took some Asia-Pacific analysts by surprise, while others had predicted consolidation in the hard-hit technology industry.

But technology observers agreed that computer-making competitors, such as Dell Computer, could exploit the inevitable turmoil by aggressively angling for customers while HP and Compaq awaited United States regulatory approval and merged operations.

Dell is the industry's runaway leader in personal-computer production, and will remain so after the takeover.

Compaq is the world's second-largest computer maker and HP the third.

'This is going to lead to uncertainty in both of these companies,' said Dane Anderson, vice-president of Internet and computing systems research at International Data Corp Asia-Pacific.

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