Andantech L.L.C., Wells Fargo Equipment Finance, Inc. (f.k.a. Norwest Equipment Finance, Inc.), Tax Matters Partner, and Wells Fargo & Co., A Partner Other Than the Tax Matters Partner, et al. - Page 108




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          announcement that it would no longer publish list prices for its              
          9021 and 9121 computer models, and that it would provide discounts            
          to purchasers of those models in order to retain its market share;            
          (3) increased competition from other manufacturers (such as Amdahl            
          Computer Corp. and Hitachi Data Systems, Inc.); and (4) IBM’s                 
          adoption of a “market basket approach”, whereby IBM bundled                   
          hardware, software, and services into a single package, charging a            
          single price.                                                                 
               Respondent’s experts testified that in 1993 the mainframe                
          market community was aware that IBM would be introducing new                  
          technology22 which would shorten the lives (and adversely affect the          
          residual values) of the IBM 9021 and 9121 models; however, they               
          acknowledged that the specifics of the new technology were unknown.           
          Ms. Middleton acknowledged that in the fall of 1993, there was some           
          speculation as to whether IBM could successfully develop CMOS                 
          technology, and if IBM could, when IBM would be able to bring a               
          product (using that technology) to market.                                    
               The September 1993 ARI appraisal claims that the “unusual                
          pessimism” of the residual value estimates by the Gartner Group,              
          IDC, and DMC are the result of several assumptions, including the             
          prediction that “IBM will introduce revolutionary technology in               
          January 1996 and that the value of * * * [the computers] will                 


               22   A Nov. 10, 1993, New York Times article reported that               
          IBM had introduced a big new computer to replace its antiquated               
          mainframe line.                                                               




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