The head of

Compaq

(CPQ)

has predicted a sales slowdown in the first half of 2001, according to published reports.

Compaq's CEO, Michael Capellas, told a German news magazine that he expects a slowdown in sales growth to just below 5% during the first half, compared with 10% growth in 2000. Capellas also said that sales growth may be near zero in the first quarter, but would pick up in subsequent quarters.

The Houston, Texas-based bellwether, the third-largest computer seller, gave

guidance in January that surpassed the Street's lowered expectations, projecting sales growth of 6% to 8% for 2001 amid a slowing PC market.

In addition to lowering the company's sales expectations, Capellas also reportedly stressed

Compaq's move into developing new forms of Internet accessing systems.

"Our task in the future will not be to put cumbersome boxes on people's tables," Capellas said.

Shares of the company closed at $22.50 in Friday trading on the

New York Stock Exchange

and have a 52-week range of $35 to $14.30.