HP buys Compaq - what next?

Just two hours before the combined HP-Compaq addresses the world via the gift of conference call, we think it is time to make some predictions.

The HPQ ticker is live - and up three per cent today. Compaq personnel in Houston and beyond are learning about that famous HP way, and hard decisions over product lines have been made. But what are they?

On the PC front expect a massive 'jury out'. The Pavilion and Presario lines from HP and Compaq respectively both command large market shares, though in the US consumer market Pavilion has the edge, touché Presario for corporates.

The boldest move of all would be to halt both money losing operations and concentrate on high-margin businesses. Dell would love that, maybe too much for Carly and co to entertain such an industry reshaping move.

For low end Wintel servers, Compaq is a natural choice, while at the higher end - still exclusively Intel-based following HP and Compaq ditching their own architectures - HP-UX will win over Tru64 Unix.

For laptops, Compaq's Armada may just have the edge, though we can expect another wait-and-see period. The same goes in the PDA space. Everyone expects the successful Compaq iPaq to get the nod but that'll be a hard one for the HP top brass to stomach, especially as the similarly Pocket PC-based Jornada isn't a bad machine.

What else is there? For storage, Compaq wins; printers - HP of course. On the networking front, HP again has the edge, and when it comes to software, well, Compaq doesn't bring much software to the table. HP's OpenView network management product will go forward.

And of course there's the biggie - HP would be mad not to nurture and invest in Compaq's services organisation, perhaps the main reason for the deal.

This is to over-simplify. And we won't get all these answers at 18:30(BST) - maybe a hint or two, almost certainly a sense of taking one step at a time.

The Walter Hewlett protest took a lot of wind out of the merger sails and the new, combined management won't be wanting to put a foot wrong.

We'll be back tomorrow to see how we've done, if we've learnt much at all.