SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999


                          COMMISSION FILE NUMBER 1-9026


                           COMPAQ COMPUTER CORPORATION
             (Exact name of registrant as specified in its charter)


                          DELAWARE                  76-0011617
              (State or other jurisdiction of     (I.R.S. Employer
             incorporation or organization)       Identification No.)


                       20555 SH 249, HOUSTON, TEXAS 77070
                                 (281) 370-0670
          (Address, including zip code, and telephone number, including
             area code, of registrant's principal executive offices)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file  such  reports),  and  (2)  has  been  subject to such filing
requirements  for  the  past  90  days.

                              Yes  [ X ]   No  [   ]


The  number  of  shares  of  the  registrant's  Common  Stock,  $.01  par value,
outstanding  as  of  March  31,  1999,  was  approximately  1.7  billion.

<PAGE>
                         PART I.  FINANCIAL INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS

<TABLE>
<CAPTION>
                                  COMPAQ COMPUTER CORPORATION
                                  CONSOLIDATED BALANCE SHEET
                                         (UNAUDITED)

<S>                                                               <C>          <C>
                                                                        MARCH 31,    DECEMBER 31,
(In millions, except par value). . . . . . . . . . . . . . . . .         1999            1998
-------------------------------------------------------------------------------------------------
ASSETS

Current assets:
 Cash and cash equivalents . . . . . . . . . . . . . . . . . . .  $     3,609  $       4,091
 Accounts receivable, net. . . . . . . . . . . . . . . . . . . .        6,989          6,998
 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . .        2,149          2,005
 Deferred income taxes . . . . . . . . . . . . . . . . . . . . .        1,556          1,602
 Other current assets. . . . . . . . . . . . . . . . . . . . . .          483            471
                                                                  ------------ --------------

   Total current assets. . . . . . . . . . . . . . . . . . . . .       14,786         15,167
                                                                  -----------  --------------
Property, plant and equipment, less accumulated depreciation . .        2,948          2,902
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . .        1,640          1,341
Intangible and other assets. . . . . . . . . . . . . . . . . . .        3,626          3,641
                                                                  ------------ --------------
                                                                  $    23,000  $      23,051
                                                                  ===========  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable. . . . . . . . . . . . . . . . . . . . . . . .  $     4,106  $       4,237
 Income taxes payable. . . . . . . . . . . . . . . . . . . . . .          469            282
 Accrued restructuring costs . . . . . . . . . . . . . . . . . .          895          1,110
 Other current liabilities . . . . . . . . . . . . . . . . . . .        4,908          5,104
                                                                  ------------ --------------
   Total current liabilities . . . . . . . . . . . . . . . . . .       10,378         10,733
                                                                  ------------ --------------
Postretirement and other postemployment benefits . . . . . . . .          542            545
                                                                  ------------ --------------
Minority interest. . . . . . . . . . . . . . . . . . . . . . . .          422            422
                                                                  ------------ --------------
Stockholders' equity:
 Preferred stock, $.01 par value
   (authorized: 10 million shares; issued: none) . . . . . . . .            -               -
 Common stock and capital in excess of $.01 par value
   (authorized: 3 billion shares; issued and outstanding:
   1,706 million and 1,691 million shares at March 31, 1999 and
   1,698 million and 1,687 million shares, at December 31, 1998)        7,469          7,270
 Retained earnings . . . . . . . . . . . . . . . . . . . . . . .        4,699          4,465
 Treasury stock (at cost). . . . . . . . . . . . . . . . . . . .         (510)          (384)
                                                                  ------------ --------------
   Total stockholders' equity. . . . . . . . . . . . . . . . . .       11,658         11,351
                                                                  ------------ --------------
                                                                  $    23,000  $      23,051
                                                                  ============ ==============
</TABLE>
                      See accompanying notes to consolidated financial data.

                                        2
<PAGE>
<TABLE>
<CAPTION>
                      COMPAQ COMPUTER CORPORATION
                   CONSOLIDATED STATEMENT OF INCOME
                              (UNAUDITED)

                                                QUARTER  ENDED
                                                   MARCH 31,
                                              -----------------
(In millions, except per share amounts)        1999      1998
                                              -------  --------
<S>                                           <C>      <C>
Revenue:
     Products. . . . . . . . . . . . . . . .  $7,819   $ 5,574
     Services. . . . . . . . . . . . . . . .   1,600       113
                                              -------  --------
           Total revenue . . . . . . . . . .   9,419     5,687
                                              -------  --------

Cost of sales:
     Products. . . . . . . . . . . . . . . .   6,007     4,601
     Services. . . . . . . . . . . . . . . .   1,085        63
                                              -------  --------
           Total cost of sales . . . . . . .   7,092     4,664
                                              -------  --------

Selling, general and administrative expense.   1,477       785
Research and development costs . . . . . . .     404       245
Other income and expense, net. . . . . . . .      34       (30)
                                              -------  --------
                                               1,915     1,000
                                              -------  --------

Income before provision for income taxes . .     412        23
Provision for income taxes . . . . . . . . .     131         7
                                              -------  --------
Net income . . . . . . . . . . . . . . . . .  $  281   $    16
                                              =======  ========

Earnings per common share:
 Basic . . . . . . . . . . . . . . . . . . .  $ 0.17  $  0.01
                                              ======  =======
 Diluted . . . . . . . . . . . . . . . . . .  $ 0.16  $  0.01
                                              ======  =======

Shares used in computing earnings per
common share:
 Basic . . . . . . . . . . . . . . . . . . .   1,689    1,523
                                              ======  =======
 Diluted . . . . . . . . . . . . . . . . . .   1,750    1,584
                                              ======  =======
</TABLE>

    See accompanying notes to consolidated financial data.
        
                                3
<PAGE>
<TABLE>
<CAPTION>

                           COMPAQ COMPUTER CORPORATION
                       CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

                                                                  QUARTER ENDED
                                                                     MARCH 31,
                                                               ------------------
(In millions)                                                    1999      1998
                                                               --------  --------
<S>                                                            <C>       <C>
Cash flows from operating activities:
   Net income . . . . . . . . . . . . . . . . . . . . . . . .  $    281  $     16
   Adjustments to reconcile net income to net cash
 provided by operating activities:
   Depreciation and amortization. . . . . . . . . . . . . . .       304       151
   Deferred income taxes. . . . . . . . . . . . . . . . . . .      (130)        -
   Changes in operating assets and liabilities, net of
   effects of purchased business:
     Accounts receivable. . . . . . . . . . . . . . . . . . .        85       119
     Inventories. . . . . . . . . . . . . . . . . . . . . . .      (144)      314
     Other current assets . . . . . . . . . . . . . . . . . .       (12)       (9)
     Accounts payable . . . . . . . . . . . . . . . . . . . . .    (137)      (23)
     Income taxes payable . . . . . . . . . . . . . . . . . . .     187        62
     Accrued restructuring costs. . . . . . . . . . . . . . . .    (215)        -
     Other current liabilities. . . . . . . . . . . . . . . . .    (141)     (195)
                                                               --------  --------
     Net cash provided by operating activities. . . . . . . .        78       435
                                                               --------  --------
Cash flows from investing activities:
 Purchases of property, plant and equipment, net. . . . . . .      (216)     (157)
 Proceeds from sales of short-term investments. . . . . . . .         -       344
 Acquisition of business, net of cash acquired. . . . . . . .      (219)        -
 Other, net . . . . . . . . . . . . . . . . . . . . . . . . .        33       (27)
                                                               --------  --------
     Net cash provided by  investing activities . . . . . . .      (402)      160
                                                               --------  --------
Cash flows from financing activities:
 Purchase of treasury shares. . . . . . . . . . . . . . . . .      (126)        -
 Issuance of common stock pursuant to stock option plans. . .        99        58
 Tax benefit associated with stock options. . . . . . . . . .        68         -
 Dividends paid . . . . . . . . . . . . . . . . . . . . . . .       (34)      (23)
                                                               --------  --------
     Net cash provided by financing activities. . . . . . . .         7        35
                                                               --------  --------
Effect of exchange rate changes on cash and cash equivalents.      (165)       59
                                                               --------  --------
     Net (decrease) increase in cash and cash equivalents . .      (482)      689
Cash and cash equivalents at beginning of period. . . . . . .     4,091     6,418
                                                               --------  --------
Cash and cash equivalents at end of period. . . . . . . . . .  $  3,609  $  7,107
                                                               ========  ========
</TABLE>

             See accompanying notes to consolidated financial data.

                                        4
<PAGE>
                           COMPAQ COMPUTER CORPORATION
                      NOTES TO CONSOLIDATED FINANCIAL DATA

NOTE  1  -  BASIS  OF  PRESENTATION
-----------------------------------

     The  accompanying unaudited consolidated financial data for Compaq Computer
Corporation  ("Compaq")  as  of March 31, 1999 and December 31, 1998 and for the
quarters  ended  March 31, 1999 and 1998 have been prepared on substantially the
same  basis  as  Compaq's annual consolidated financial statements.  In Compaq's
opinion,  the data reflects all adjustments, consisting only of normal recurring
adjustments,  necessary for a fair presentation of the results for those periods
and  the  financial  condition  at  those  dates.  The  consolidated results for
interim periods are not necessarily indicative of results to be expected for the
full  year.  The  accompanying  unaudited  consolidated financial data should be
read  in  conjunction with Compaq's 1998 Annual Report on Form 10-K for the year
ended  December  31,  1998.

     Compaq  completed  the acquisition of Digital Equipment Corporation in June
1998.  This  acquisition  was  accounted  for  under  the  purchase  method  of
accounting.  Accordingly,  the  results  of  operations  and  the estimated fair
market  value  of  the  assets acquired and liabilities assumed were included in
Compaq's  financial  statements  from  the  date  of  acquisition.

NOTE  2  -  ACQUISITIONS
------------------------

     In February 1999, Compaq completed a cash tender offer for Shopping.com, an
on-line  retailer  that  offers Internet shoppers an array of consumer products.
The  aggregate purchase price of $257 million consisted of $219 million in cash,
the  issuance  of  employee  stock  options with a fair value of $32 million and
other  acquisition  costs.  The transaction was accounted for under the purchase
method  of  accounting.  Accordingly,  the results of operations of the acquired
business  and  the  estimated  fair  market  values  of  the acquired assets and
liabilities  were  included  in  Compaq's  financial statements from the date of
acquisition.  The  aggregate  purchase price has been preliminarily allocated to
the  assets  and  liabilities acquired, consisting primarily of goodwill that is
being  amortized  over  a three year period.  Pro forma statements of operations
reflecting  the  acquisition  of  Shopping.com  are  not shown as they would not
differ  materially  from  reported  results.

NOTE  3  -  RESTRUCTURING  ACTIONS
----------------------------------

     In  June  1998,  management  approved  restructuring plans to integrate the
operations  of  Compaq  and Digital.  The accrued restructuring costs related to
these  plans  include  the  cost  of  involuntary  employee separation benefits,
consolidation  of  duplicative  facilities,  the  cost  of  terminating  Digital
contractual  obligations,  and  relocation costs of Digital employees.  Employee
separation  benefits  include  severance,  medical  and  other  benefits.
Restructuring  costs  related  to  Digital  were  recorded as a component of the
preliminary  purchase  price allocation and costs related to Compaq were charged
to  operations.

     The  cost  of  employee  separations  associated  with  this  restructuring
includes  separation  benefits  estimated  for  approximately  12,400  Digital
employees  and 5,000 Compaq employees.  Employee separations affect the majority
of  business functions, job classes and geographies, with most of the reductions
occurring  in  North  America and Europe.  The restructuring plans also included
costs  associated  with  the  closure  of  13.2  million  square feet of office,
distribution  and  manufacturing space, principally in North America and Europe.
Compaq  expects that most of the restructuring actions will be completed by June
1999.

                                        5
<PAGE>
The  accrued restructuring costs and amounts charged against the provision as of
March  31,  1999,  were  as  follows:

<TABLE>
<CAPTION>
                                    DECEMBER 31,        CASH       MARCH 31,
                                        1998        EXPENDITURES      1999
                                    -------------  --------------  ----------
                                                   (IN MILLIONS)
<S>                                 <C>            <C>             <C>
Employee separations . . . . . . .  $         723  $        (187)  $      536
Facility closure costs . . . . . .            317            (20)         297
Relocation . . . . . . . . . . . .             43             (2)          41
Other exit costs . . . . . . . . .             27             (6)          21
                                    -------------  --------------  ----------
Total accrued restructuring costs.  $       1,110  $        (215)  $      895
                                    =============  ==============  ==========
</TABLE>

     The  total  accrued restructuring cost of $895 million includes amounts for
actions  that have already been taken, but cash expenditures have not been made.
Approximately  $200  million  of the accrual at March 31, 1999 relates to future
cash  payments  to  employees  separated  prior  to  March  31,  1999.

     For  the  quarter  ended  March  31,  1999,  employee  separations  due  to
restructuring actions totaled 2,051. The net headcount reduction for the quarter
ended  March  31,  1999 including attrition and restructuring, offset by hiring,
totaled  approximately  1,400.  Since  the  date  of  the  Digital  acquisition,
employee  separations  due  to  restructuring  actions  were  12,593.  The  net
headcount  reduction  since  the  date  of  the  Digital  acquisition, including
attrition  and  restructuring,  offset  by  hiring,  was  approximately  14,200.

NOTE  4  -  INVENTORIES
-----------------------

     Inventories  consisted  of  the  following:

<TABLE>
<CAPTION>
                    MARCH 31,   DECEMBER 31,
                       1999         1998
                    ----------  -------------
                         (IN MILLIONS)
<S>                 <C>         <C>
 Raw materials . .  $      441  $         404
 Work in progress.         388            403
 Finished goods. .       1,320          1,198
                    ----------  -------------
                    $    2,149  $       2,005
                    ==========  =============
</TABLE>

NOTE  5  -  TREASURY  STOCK
---------------------------

     Compaq  repurchased approximately three million shares in the quarter ended
March  31,  1999,  for a cost of approximately $126 million under the systematic
stock  repurchase  program  implemented  in  May  1998.

                                        6
<PAGE>
NOTE  6  -  OTHER  INCOME  AND  EXPENSE
---------------------------------------

     Other  income  and  expense  consisted  of  the  following:

<TABLE>
<CAPTION>
                                    QUARTER ENDED MARCH 31,
                                    -----------------------
                                        1999     1998
                                       -------  -------
                                         (IN MILLIONS)
<S>                                    <C>      <C>
Interest and dividend income. . . . .  $   (52)  $  (85)
Interest (income) expense associated.        1       (1)
 with hedging
Other interest expense. . . . . . . .       40       40
Currency losses, net. . . . . . . . .       31        4
Minority interest dividend. . . . . .        9        -
Other, net. . . . . . . . . . . . . .        5       12
                                       -------  -------
                                       $    34  $   (30)
                                       =======  ========
</TABLE>

NOTE  7  -  COMPREHENSIVE  INCOME
---------------------------------

     Comprehensive  income  is comprised of two components: net income and other
comprehensive  income.  Other comprehensive income refers to revenues, expenses,
gains  and  losses  that  under  generally  accepted  accounting  principles are
recorded as an element of stockholders' equity and are excluded from net income.
Compaq's  other  comprehensive income is comprised primarily of foreign currency
translation  adjustments from international subsidiaries and adjustments made to
recognize  additional  minimum  liabilities  associated with the defined benefit
pension  plans.  Cumulative  other comprehensive loss for the three months ended
March 31, 1999 was $49 million and for the three months ended March 31, 1998 was
$21  million.  The  components  of  comprehensive  income  are  listed  below:

<TABLE>
<CAPTION>
                                QUARTER ENDED MARCH 31,
                                -----------------------
                                    1999     1998
                                   -------  ------
                                    (IN MILLIONS)
<S>                                <C>      <C>
Net income. . . . . . . . . . . .  $   281  $   16
Other comprehensive income (loss)      (13)     (3)
                                   -------  ------
Comprehensive income. . . . . . .  $   268  $   13
                                   =======  ======
</TABLE>

NOTE  8  -  EARNINGS  PER  COMMON  SHARE
----------------------------------------

     Basic  earnings  per  common  share  is computed using the weighted average
number  of  common  shares  outstanding during the period.  Diluted earnings per
common  share  is  computed  using  the  combination  of  dilutive  common share
equivalents  and the weighted average number of common shares outstanding during
the  period.  Incremental  shares of 61 million for the quarters ended March 31,
1999 and 1998 were used in the calculation of diluted earnings per common share.

     Stock options to purchase 36 million shares of common stock for the quarter
ended March 31, 1999, and 9 million shares of common stock for the quarter ended
March  31, 1998, were outstanding but not included in the computation of diluted
earnings per common share because the option exercise price was greater than the
average  market  price  of  the  common  shares.

                                        7
<PAGE>
NOTE  9  -  SEGMENT  DATA
-------------------------

     Compaq  manages  its  business  segments  primarily  on a geographic basis.
Compaq's  reportable  segments are comprised of North America and Europe, Middle
East  and  Africa  (EMEA).  Other  segments  include  Japan, Greater China, Asia
Pacific  and  Latin  America.

     Compaq  evaluates  the performance of its segments based on segment profit.
Segment  profit for each segment includes sales and marketing expenses and other
overhead charges directly attributable to the segment and excludes expenses that
are  managed  outside the business segments.  Costs excluded from segment profit
primarily  consist  of  corporate expenses and income taxes.  Corporate expenses
include  research  and  development  costs, certain costs related to the Digital
integration,  corporate  marketing  costs  and  other general and administrative
expenses.  Compaq  does  not include intercompany transfers between segments for
management  reporting  purposes.  Services  revenue is presented on a management
reporting  basis  and  includes  $140  million of products revenue that consists
primarily  of  spare  parts  and  third-party  product  sales.

     Summary  information  by  segment  is  as  follows:

<TABLE>
<CAPTION>
                           QUARTER ENDED
                              MARCH 31,
                          ---------------
(IN MILLIONS)              1999    1998
                          ------  -------
<S>                       <C>     <C>
NORTH AMERICA:
   Revenue:
          Products . . .  $3,700  $ 2,744
          Services . . .     602       45
   Gross margin:
          Products . . .     916      210
          Services . . .     249       25
   Segment profit (loss)     710      (68)
-----------------------------------------
EMEA:
   Revenue:
          Products . . .  $2,953  $ 2,144
          Services . . .     815       33
   Gross margin:
          Products . . .     736      519
          Services . . .     252       22
   Segment profit. . . .     602      352
-----------------------------------------
OTHER SEGMENTS:
   Revenue:
          Products . . .  $1,026  $   686
          Services . . .     323       35
   Gross margin:
           Products. . .     235      147
           Services. . .     112        8
   Segment profit. . . .     127       28
-----------------------------------------
</TABLE>

                                        8
<PAGE>
     A reconciliation of Compaq's segment gross margin and segment profit to the
corresponding  consolidated  amounts  is  as  follows:

<TABLE>
<CAPTION>
                                                     QUARTER ENDED
                                                       MARCH 31,
                                                ------------------------
(IN MILLIONS)                                      1999           1998
                                                -----------     --------
<S>                                             <C>             <C>
Segment gross margin . . . . . . . . . . . . .  $    2,500      $   931 
Non-segment gross margin . . . . . . . . . . .        (173)(1)       92(1)
                                                -----------     --------
     Total gross margin. . . . . . . . . . . .  $    2,327      $ 1,023 
                                                -----------     --------

Segment profit . . . . . . . . . . . . . . . .  $    1,439      $   312 
Corporate expenses, net. . . . . . . . . . . .      (1,027)        (289)
                                                -----------     --------
     Income before provision for income taxes.  $      412      $    23 
                                                -----------     --------
<FN>
(1)Non-segment  gross  margin  primarily  relates  to manufacturing and services
amounts  not  allocated  to  the  geographic  segments on a management reporting
basis.
</TABLE>

NOTE  10  -  LITIGATION
-----------------------

General  Litigation
-------------------

     Compaq  is  subject  to  legal  proceedings  and  claims  that arise in the
ordinary  course  of  business.  Management does not believe that the outcome of
any  of  those  matters  will  have  a  material  adverse  effect  on  Compaq's
consolidated  financial  position,  operating  results  or  cash  flows.

Class  Action  Litigation
-------------------------

     Compaq  is  subject  to  a number of shareholder class action claims.  Five
purported class action lawsuits of all persons who purchased Compaq common stock
from  July  10, 1997 through March 6, 1998, have been consolidated in the United
States District Court for the Southern District of Texas, Houston Division.  The
named  defendants  for  these actions include Compaq and some of its current and
former  officers  and  directors.  The  complaints  allege  that  the defendants
violated  federal  securities  laws  by  withholding  information  and  making
misleading  statements  about  channel inventory and factoring of receivables in
order  to inflate the market price of Compaq's common stock, and further alleges
that  a  number  of  individual  defendants  sold  Compaq  common stock at these
inflated prices.  Lead counsel for the plaintiff has been appointed.  Plaintiffs
filed  a  consolidated  amended  complaint  on  March  16,  1999.

     A  number of  purported  class actions  were filed in  March and April 1999
against  Compaq in the United States District Court for the Southern District of
Texas,  Houston Division.  These actions name Compaq and a number of its current
and former executive officers as defendants and are purported to be on behalf of
persons  who  purchased  Compaq stock from January 27, 1999 through February 25,
1999, or from January 27, 1999 through April 9, 1999.  The actions assert claims
under  federal  securities laws.  The complaints allege that defendants inflated
the  price  of  Compaq  stock  by  making  false and misleading statements about
Compaq's  revenue  and further allege that a number of current and former Compaq
officers  sold  Compaq  stock  at  these inflated prices.  The plaintiffs in the
above  actions  seek  monetary  damages,  interest,  costs  and  expenses.

     Several  purported  class action lawsuits were filed against Digital during
1994  alleging  violations  of  federal  securities  laws  arising  from alleged
misrepresentations  and  omissions in connection with Digital's sale of Series A
8-7/8%  Cumulative  Preferred  Stock  and  Digital's  financial  results for the
quarter  ended  April 2, 1994.  During 1995, the lawsuits were consolidated into

                                        9
<PAGE>
three  cases, which were pending before the United States District Court for the
district  of  Massachusetts.  On August 8, 1995, the Massachusetts federal court
granted the defendants' motion to dismiss all three cases in their entirety.  On
May  7,  1996, the United States Court of Appeals for the First Circuit affirmed
in part and reversed in part the dismissal of two of the cases, and remanded for
further  proceedings.  The  parties  are  proceeding  with  discovery.

     Compaq  believes  these suits are without merit and intends to defend these
suits  vigorously.

NOTE  11  -  SUBSEQUENT  EVENTS
-------------------------------

     In  April  1999,  Compaq  completed  the acquisition of Zip2 Corporation, a
provider of Internet platform solutions for media companies and local e-commerce
merchants.  Total  consideration  for  the  acquisition  was  approximately $307
million  in  cash,  the issuance of employee stock options and other acquisition
costs.  The  transaction  will  be  accounted  for  under the purchase method of
accounting.

     In  April  1999,  Digital  redeemed  its  16 million outstanding depositary
shares  of  Series  A  8-7/8%  Cumulative  Preferred  Stock, each representing a
one-fourth  interest  in  a  share  of  the Series A 8-7/8% Cumulative Preferred
Stock,  par  value $1.00 per share.  The redemption price was $400 million, plus
accrued  and  unpaid  dividends  of  $9  million.  The minority interest of $422
million  on  Compaq's  March  31, 1999 Consolidated Balance Sheet represents the
fair  value  of Digital's Series A Preferred Stock as of the date of the Digital
acquisition.

     In  April  1999,  the shareholders approved the Compaq Computer Corporation
Employee  Stock  Purchase  Plan (the Plan).  Once the Plan is fully implemented,
generally  all  employees  will  be eligible to participate, although Compaq may
impose  an  eligibility  period  of  up  to  two  years  of  employment or other
eligibility  requirements.  Compaq  plans to begin implementation of the Plan in
the  first  quarter of 2000. Employees who choose to participate will be granted
an  option  to purchase common stock at 85% of market value on the first or last
day  of  the  purchase  period,  whichever is lower.  The purchase period may be
three  months, six months, or other periods as determined by the Plan Committee.
The  Plan  authorizes  the  issuance, and the purchase by employees, of up to 25
million  shares  of  common  stock  through  payroll deductions.  No employee is
allowed  to  buy  more  than  $25,000  of common stock in any year, based on the
market  value  of  the  common  stock  at  the beginning of the purchase period.

                                       10
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

     The  following  discussion  should  be  read  in  conjunction  with  the
consolidated  interim  financial  statements.

RESULTS  OF  OPERATIONS

     The  following  table  presents,  as  a  percentage  of  revenue,  selected
consolidated  financial  data:

<TABLE>
<CAPTION>
                                          QUARTER ENDED MARCH 31,
                                          -----------------------
                                               1999     1998
                                              -------  -------
<S>                                           <C>      <C>
Revenue:
 Products. . . . . . . . . . . . . . . . . .    83.0%    98.0%
 Services. . . . . . . . . . . . . . . . . .    17.0      2.0
                                              -------  -------
Total revenue. . . . . . . . . . . . . . . .   100.0    100.0

Cost of sales:
 Products. . . . . . . . . . . . . . . . . .    76.8     82.5
 Services. . . . . . . . . . . . . . . . . .    67.8     55.8
     Total cost of sales. . . . . . . . . .     75.3     82.0

Gross margin:
 Products. . . . . . . . . . . . . . . . . .    23.2     17.5
 Services. . . . . . . . . . . . . . . . . .    32.2     44.2
     Total gross margin . . . . . . . . . .     24.7     18.0

Selling, general and administrative expenses    15.7     13.8
Research and development costs . . . . . . .     4.3      4.3
Other income and expense, net. . . . . . . .     0.3     (0.5)
                                              -------  -------
                                                20.3     17.6
                                              -------  -------
Income before provision for income taxes . .     4.4%     0.4%
                                              =======  =======
</TABLE>

OVERVIEW

     Compaq's  recent  acquisitions  have  resulted  in an expanded and enhanced
business  model,  focused  on  open  industry-standard  products,  leadership
enterprise technology and solutions and a full line of global service offerings.
Compaq  delivers  customer  value  through  standards-based,  partner-leveraged
computing  that features services, support and market-segment focused solutions,
particularly  in  communications,  manufacturing  and  finance.  Compaq  is  a
strategic  information  technology  partner to customers of all sizes, providing
product  offerings  that  range  from  handheld  devices  to  powerful  failsafe
computers.

     The first quarter of 1999 reflects significant growth primarily as a result
of  the  acquisition  of  Digital.  The  acquisition was accounted for under the
purchase  method  of accounting.  Accordingly, the results of operations and the
estimated  fair market value of the assets acquired and liabilities assumed were
included  in  Compaq's  financial  statements from the date of acquisition.  The
growth  in  the first quarter of 1999 was lower than expected due to a number of
factors  as discussed in "Revenue" and "Gross Margin" below.  Comparatively, the
first  quarter  of  1998 was negatively impacted by significant price reductions
and  promotional  activities  in  the  North  America  market  place  related to
commercial  products  due  to  lower  than expected sales out of the channel and
significant  competitive  pricing  conditions.

                                       11
<PAGE>
REVENUE

     Revenue  for the first quarter of 1999 increased $3.7 billion or 65.6% over
the  comparable  period in 1998, driven by the acquisition of Digital as well as
by  growth  in  previously  existing  business  areas.

     Products revenue for the first quarter of 1999 increased approximately $2.2
billion  or  40.3%  over  the  first  quarter of 1998.  Products revenue in 1999
reflected  a  growth  in worldwide unit sales of 25.5% over the first quarter of
1998.  Growth in options revenue was 44.2% in 1999 compared to the first quarter
of  1998.  The increase in products revenue was primarily due to the acquisition
of  Digital  as  well  as  unit  growth achieved in previously existing business
areas,  offset  by  increased  competitive  pricing.  Revenue  related  to  the
commercial  PC  business  was  below  internal  expectations  due  to  increased
competitive pricing.  Additionally, revenue in the higher-end enterprise systems
was  lower  than  internally  expected.

     Products revenue for North America grew $1.0 billion or 34.8% for the first
quarter  of 1999 over 1998.  Products revenue in North America represented 48.2%
of  total  products  revenue  in  the  first  quarter of 1999 and 49.2% of total
products  revenue in the first quarter of 1998.  Products revenue growth in 1999
primarily  related to the acquisition of Digital and growth in industry standard
servers,  storage  and  consumer  products.

     Products  revenue  for  Europe,  Middle East and Africa (EMEA) in the first
quarter  of  1999  grew  $809  million  or 37.7% over the first quarter of 1998.
Products  revenue  in  EMEA  represented  38.5% of total products revenue in the
first  quarter  of 1999 and 38.5% of total products revenue in the first quarter
of  1998.  Products  revenue growth in 1999 was due primarily to the acquisition
of  Digital and  growth in commercial  desktops  and industry standard  servers.

     Services revenue for the first quarter of 1999 increased approximately $1.5
billion  over the comparable quarter of 1998 primarily due to the acquisition of
Digital.  Services  revenue  for  the first quarter of 1998 related primarily to
professional services provided by Tandem.  On a normalized basis, total services
revenue  for  the  quarter  ended  March  31,  1999  grew  by  approximately  7%
year-over-year.  Both  customer  services and professional services grew for the
quarter  ended  March  31,  1999.

     Services  revenue for North America for the first quarter of 1999 grew $557
million  over  the  first  quarter  of  1998.  Services revenue in North America
represented  34.6%  of  total  services revenue in the first quarter of 1999 and
39.8%  of total services revenue in the first quarter of 1998.  Services revenue
for  EMEA for the first quarter of 1999 grew $782 million over the first quarter
of  1998.  Services  revenue in EMEA represented 46.8% of total services revenue
in  the  first  quarter of 1999 and 29.2% of total services revenue in the first
quarter  of  1998.

GROSS  MARGIN

     Gross  margin  as a percentage of revenue was 24.7% in the first quarter of
1999,  up  from  18.0% in the first quarter of 1998.  Products gross margin as a
percentage of products revenue was 23.2% for the first quarter of 1999 and 17.5%
for  the  first  quarter  of  1998.  The  increase in gross margin for the first
quarter  of  1999  compared  to  1998  was  due to the 1998 price reductions and
additional  promotional activities on commercial products taken in North America
due  to  lower  than  expected  sales  out  of  the  channel  and  to respond to
competitive pricing conditions.  Gross margins in the first quarter of 1999 were
below  both  internal  expectations,  and the fourth quarter 1998 performance of
26.4%,  due  to  the  product revenue shortfall as described in "Revenue" above,
increased  price competition, and a less favorable mix of higher margin products
and  options.

                                       12
<PAGE>
     Products  gross margin as a percentage of products revenue in North America
was  24.8% for the first quarter of 1999 and 7.7% for the first quarter of 1998.
Products  gross margin as a percentage of products revenue in EMEA was 24.9% for
the  first  quarter  of  1999  and  24.2%  for  the  first  quarter  of  1998.

     Services gross margin as a percentage of services revenue was 32.2% for the
first  quarter  of 1999 and 44.2% for the first quarter of 1998.  Services gross
margin  as  a  percentage of services revenue in North America was 41.4% for the
first  quarter  of  1999  and  55.6%  for  the  first quarter of 1998.  Services
gross margin as a percentage of services revenue in EMEA was 30.9% for the first
quarter  of 1999 and 66.7% for the first quarter of 1998.  Services gross margin
in  1999  is  not comparable to services gross margin in 1998 as a result of the
acquisition  of  Digital.

OPERATING  EXPENSES

     Research and development costs increased $159 million or 64.9% in the first
quarter  of  1999  as  compared  to  1998,  primarily  due to the acquisition of
Digital.  Research  and  development  costs as a percentage of revenue were 4.3%
for  both  the  quarter  ended  March  31,  1999  and March 31, 1998.  Compaq is
committed  to  maintaining  a  significant  level  of  research  and development
investment  in  support of its activities as a full-service enterprise computing
company,  offering  leadership  technologies  and  products  for  the  future.

     Compaq's selling, general and administrative expense increased $692 million
or  88.2%  in the first quarter of 1999 as compared to 1998.  As a percentage of
revenue,  selling,  general  and  administrative  expense was 15.7% in the first
quarter  of  1999  and  13.8%  in  the first quarter of 1998.  The increase as a
percentage  of  revenue in the first quarter of 1999 over 1998 was primarily due
to  the  acquisition  of  Digital, which historically maintained higher selling,
general  and  administrative  expense as a percentage of revenue, and lower than
expected  total  revenue.  In  the  first quarter of 1999, operating expenses in
absolute  dollars  declined  due  to  the  continued  implementation  of  the
restructuring  plans  and  realization  of synergies for the combined companies.

PURCHASED  IN-PROCESS  TECHNOLOGY

     Upon  consummation of the Digital acquisition in June 1998, Compaq expensed
approximately $3.2 billion representing purchased in-process technology that had
not  yet  reached  technological  feasibility and had no alternative future use.
The  value  was  determined  by  estimating  the  costs to develop the purchased
in-process  technology  into  commercially  viable  products,  estimating  the
resulting  net cash flows from such projects, and discounting the net cash flows
back  to  their  present values.  The discount rate includes a factor that takes
into  account  the  uncertainty  surrounding  the  successful development of the
purchased  in-process  technology.

     If  these  projects  are  not  successfully developed, Compaq's revenue and
profitability  may  be  adversely affected in future periods.  Additionally, the
value  of other intangible assets acquired may become impaired.  Compaq began to
benefit  from  the  purchased  in-process  technology  in  late  1998  and  is
continuously  monitoring  its  development  projects.  The  development  efforts
related  to  the  majority  of  the purchased in-process technology projects are
progressing  in  accordance  with  the assumptions underlying the appraisal.  As
expected  in  the  normal  course  of product development, certain projects have
experienced  delays  and  other  projects  are being evaluated due to changes in
strategic  direction  and  market  conditions,  however,  these  factors are not
expected  to  have  a  material  adverse  affect  on  results  of operations and
financial  condition  of  future  periods.

                                       13
<PAGE>
RESTRUCTURING  ACTIONS

     In  June  1998,  management  approved  restructuring plans to integrate the
operations  of  Compaq  and Digital.  The accrued restructuring costs related to
these  plans  include  the  cost  of  involuntary  employee separation benefits,
consolidation  of  duplicative  facilities,  the  cost  of  terminating  Digital
contractual  obligations,  and  relocation costs of Digital employees.  Employee
separation  benefits  include  severance,  medical  and  other  benefits.
Restructuring  costs  related  to  Digital  were  recorded as a component of the
preliminary  purchase  price allocation and costs related to Compaq were charged
to  operations.

     The  cost of  employee  separations  associated  with  this  restructuring
includes  separation  benefits  estimated  for  approximately  12,400  Digital 
employees and 5,000 Compaq employees.  Employee separations affect the majority
of business functions, job classes and geographies, with most of the reductions
occurring  in North America and Europe.   The restructuring plans also included
costs  associated  with  the  closure  of  13.2  million square feet of office,
distribution  and  manufacturing  space,  principally  in  North  America and 
Europe.  Compaq  expects  that  most  of  the  restructuring  actions  will  be
completed by June 1999.

     The  accrued  restructuring costs and amounts charged against the provision
as  of  March  31,  1999,  were  as  follows:

<TABLE>
<CAPTION>
                                    DECEMBER 31,        CASH       MARCH 31,
                                        1998        EXPENDITURES      1999
                                    -------------  --------------  ----------
                                                   (IN MILLIONS)
<S>                                 <C>            <C>             <C>
Employee separations . . . . . . .  $         723  $        (187)  $      536
Facility closure costs . . . . . .            317            (20)         297
Relocation . . . . . . . . . . . .             43             (2)          41
Other exit costs . . . . . . . . .             27             (6)          21
                                    -------------  --------------  ----------
Total accrued restructuring costs.  $       1,110  $        (215)  $      895
                                    =============  ==============  ==========
</TABLE>

     The  total  accrued restructuring cost of $895 million includes amounts for
actions  that have already been taken, but cash expenditures have not been made.
Approximately  $200  million  of the accrual at March 31, 1999 relates to future
cash  payments  to  employees  separated  prior  to  March  31,  1999.

     For  the  quarter  ended  March  31,  1999,  employee  separations  due  to
restructuring actions totaled 2,051. The net headcount reduction for the quarter
ended  March  31,  1999 including attrition and restructuring, offset by hiring,
totaled  approximately  1,400.  Since  the  date  of  the  Digital  acquisition,
employee  separations  due  to  restructuring  actions  were  12,593.  The  net
headcount  reduction  since  the  date  of  the  Digital  acquisition, including
attrition  and  restructuring,  offset  by  hiring,  was  approximately  14,200.

OTHER  ITEMS

     Compaq  had other expense, net, of $34 million in the first quarter of 1999
and  other  income,  net,  of  $30  million in the first quarter of 1998.  Other
expense,  net,  for  the  first  quarter  of  1999  relates  to  currency losses
recognized during the period, particularly Brazil currency devaluations, as well
as  the  inclusion  of  the minority interest dividend paid to Digital preferred
shareholders,  and  lower  interest  income.

     In  June 1998, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No. 133, Accounting for Derivative Instruments
and  Hedging  Activities  (FAS  133).  FAS  133 is effective January 1, 2000 for
Compaq.  FAS  133  requires  that  all derivative instruments be recorded on the
balance  sheet  at  fair  value.  Changes  in  the fair value of derivatives are
recorded  each  period  in  current  earnings  or  other  comprehensive  income,

                                       14
<PAGE>
depending  on  whether a derivative is designated as part of a hedge transaction
and  the  type of hedge transaction.  The ineffective portion of all hedges will
be  recognized  in  current-period  earnings.  Compaq  is  in  the  process  of
determining the impact that the adoption of FAS 133 will have on its earnings or
statement  of  financial  position.

LIQUIDITY  AND  CAPITAL  RESOURCES

     Compaq's  cash  and cash equivalents decreased to $3.6 billion at March 31,
1999,  from  $4.1  billion  at December 31, 1998.  The decrease in cash and cash
equivalents  in  the  first  quarter of 1999 was primarily due to cash spent for
restructuring  activities  of  $215  million;  the  closing  of the Shopping.com
acquisition  for  approximately $219 million; $126 million in stock repurchases;
and cash used for the purchase of property, plant and equipment of $216 million.

     Operating  activities  provided $78 million in cash in the first quarter of
1999,  compared  to  $435  million  provided  in the first quarter of 1998.  The
decrease  in  cash  generated  by operating activities in the first quarter 1999
compared to 1998 was primarily due to the increase in inventories, cash payments
for  accounts  payable  and  cash  payments  for  restructuring  activities.

     Accounts  receivable  were  $7.0 billion at December 31, 1998 and March 31,
1999.  Days  sales  outstanding  for  the quarter increased to 64 days versus 56
days  in  the prior quarter.  The increase in days sales outstanding was largely
driven  by late quarter sales, with March representing a large percentage of the
first  quarter  1999  revenues.  Inventory  levels  increased to $2.1 billion at
March 31, 1999, compared to $2.0 billion at December 31, 1998, due to lower than
internally  expected  revenue  for  the quarter ended March 31, 1999.  Inventory
turns for the first quarter of 1999 decreased to 13.1 versus 15.9 for the fourth
quarter  of  1998.

     Compaq plans to use available liquidity to develop the purchased in-process
technology related to the Digital acquisition into commercially viable products.
This  primarily  consists  of  planning,  designing,  prototyping,  high-volume
manufacturing  verification  and  testing  activities  that  are  necessary  to
establish  that  a  product  can  be produced to meet its design specifications,
including  functions, features and technical performance requirements.  Bringing
the purchased in-process technology to market also includes developing firmware,
diagnostic software, device drives, and testing the technology for compatibility
and  interoperability with commercially viable products.  At March 31, 1999, the
estimated  costs  to  be incurred to develop the purchased in-process technology
into  commercially viable products totaled $3.0 billion in the aggregate through
the year 2005 ($270 million in 1999, $570 million in 2000, $610 million in 2001,
$590  million  in  2002,  $540  million  in  2003, $320 million in 2004 and $140
million  in  2005).

     In  April  1999,  Compaq used $409 million in cash to redeem the 16 million
outstanding  depository  shares  of  the  Digital  Series  A  8-7/8%  Cumulative
Preferred  Stock,  plus  accrued  dividends,  and  $307  million to complete the
acquisition  of  Zip2  Corporation.

     Future uses of cash during the remainder of 1999 includes cash expenditures
for  the majority of the planned restructuring activities as discussed above and
capital  expenditures  for land, buildings and equipment, which are estimated to
be  $700  million.

     Compaq  additionally  anticipates  future  spending  to  support and expand
AltaVista  Company,  a  wholly  owned subsidiary established to become a leading
Internet  site  for  search  capabilities, localized information, e-commerce and
e-services.  Compaq  plans  to  contribute  the  AltaVista  search  site and the
associated  intellectual  property,  Shopping.com,  and  Zip2  Corporation  to
AltaVista  Company  in  addition  to  cash  and  other  assets.

                                       15
<PAGE>
     Compaq  currently  expects to fund expenditures for capital requirements as
well  as  liquidity  needs  from  a  combination  of  available  cash  balances,
internally  generated funds and financing arrangements. Compaq from time to time
may  borrow  funds  for  actual  or  anticipated funding needs.  Compaq has a $1
billion  revolving credit facility that expires in October 1999 and a $3 billion
revolving  credit  facility that expires in 2002.  Both of these facilities were
unused at March 31, 1999.  Compaq has also established a $750 million commercial
paper  program, supported by the $3 billion credit facility, which was unused at
March  31,  1999.  Additionally,  Compaq  maintains various uncommitted lines of
credit,  which totaled approximately $450 million at March 31, 1999.  There were
no  outstanding  borrowings  against  these  lines  at  March  31, 1999.  Compaq
believes  that  these sources of credit provide sufficient financial flexibility
to  meet  future funding requirements.  Compaq continually evaluates the need to
establish  other  sources  of working capital and will pursue those it considers
appropriate  based  upon  its  needs  and  market  conditions.

FACTORS  THAT  MAY  AFFECT  FUTURE  RESULTS

     Compaq  participates in a highly volatile industry that is characterized by
intense  industry-wide  competition.  Industry  participants confront aggressive
pricing  practices,  continually  changing  customer  demand patterns, and rapid
technological  developments.  The  cautionary statements below discuss important
factors  that could cause actual results to differ materially from the projected
results  contained  in  the  forward-looking  statements  in  this  report.

     Competitive  environment  places  pressure  on  revenue  and gross margins.
Competition  remains intense in the information technology industry with a large
number  of competitors vying for market share. Competition creates an aggressive
pricing  environment,  which  continues  to  put  pressure  on revenue and gross
margins.  Some  competitors  will  accept lower margins on personal computers to
gain  high-end  sales,  services  business,  and  financing  revenues.  Compaq
experienced  competitive  pressures in the first quarter of 1999, which affected
its  sales and led to sequential reductions in its gross margins.  This pressure
may  continue  in  the  future.

     Transition  to  direct sales could negatively affect financial results.  In
recent  years  the  direct  sales market for personal computers has grown faster
than  the indirect market.  Compaq sells directly to end users in its enterprise
and services businesses and primarily sells through third party resellers in its
personal  computer  business.  Direct  sales  present  a more efficient business
model  particularly  when customer contact can be utilized to encourage sales of
higher  margin  products  that  are in stock.  Compaq does not currently have in
place  processes for order entry, production of individualized units, and direct
distribution  that  can  operate  efficiently  to  manage a large portion of its
current  personal  computer sales.  Compaq has established a variety of programs
designed  to  achieve  these capabilities.  The failure to successfully complete
these  programs  in  a timely manner could have a material adverse impact on its
business.  In  addition, a transition from indirect sales to greater reliance on
direct  sales  could  create a short-term decline in revenues if resellers favor
other  brands  before  Compaq  achieves  full  capacity to compete in the direct
sector.

     Delays  in  new systems implementation could hamper operational efficiency.
Compaq  continues  to  focus  on  making  business  and  information  management
processes  more efficient to increase the availability of information to operate
its business, increase customer satisfaction, and improve productivity and lower
costs.  In  connection  with these efforts, Compaq is moving many of its systems
from  a legacy environment of proprietary systems to client-server architectures
as  well  as integrating systems from newly acquired businesses. Integrating the
systems  at  Digital  and  Tandem  complicates this process, as does the need to
ensure  Year  2000  compliance  for  its  systems.  (See  "Year  2000 compliance
requires  significant  effort"  below.)  This  year  is  critical to this effort
because delays in the transition to new systems could hamper Compaq's efforts to
increase  its  operational  efficiency.  Further  delays  in  implementing
improvements  could  adversely  affect  inventory  levels,  cash  and  related
profitability.

                                       16
<PAGE>
     Market growth estimates depend upon evaluation of Year 2000 impact.  Compaq
expects  the personal computer market to expand in 1999 in line with third-party
research organizations' forecasts of revenue growth of 5%.  Based on third-party
research  enterprise market revenue is expected to expand at a growth rate of 8%
and the high technology service sector revenue is expected to expand at the rate
of  13%.  The  growth  of  each  of these markets in 1999 will depend in part on
customers' response to the Year 2000 transition.  Some commentators believe that
concerns  about  Year  2000  will  expand  demand  in the last half of the year,
particularly  in  the  small  and medium business arena where customers may have
delayed implementation of necessary changes.  Others believe that concerns about
implementing  new  systems  in  the face of Year 2000 concerns will slow demand,
particularly  in  fourth  quarter  sales  of  high  end products to major global
customers.

     Integrating  recently  acquired  businesses  diverts  focus  from  core
businesses.  Compaq believes that the acquisition of Digital and other companies
will  enhance  its  operating  results,  but  Compaq  confronts  challenges  in
synchronizing  diverse  product  roadmaps and business processes and integrating
logistics, marketing, product development, services and manufacturing operations
to  achieve  efficiencies.  Timing  of  these decisions is a critical element in
Compaq's  success.  Taking  the  necessary  steps may lead to gaps in short-term
performance; delaying action will reduce Compaq's ability to compete effectively
because  resources  and people will be too dispersed to achieve acceptable rates
of  return.  Compaq's  high-end  business  in  particular  has  been affected by
integration  issues involving customer perception, overlapping product lines and
the  need  to  implement  appropriate  sales force training and incentive plans.
Compaq  has  also  made  estimates  in  connection  with  the value of purchased
in-process  technology.  If  these  projects  are  not  successfully  developed,
Compaq's  future  revenue  and  profitability  may be adversely affected and the
value  of  other intangibles could be reduced. This risk is more fully discussed
under  "Purchased  In-Process  Technology."

     CEO  search  could  create  uncertainty  and  employee  retention concerns.
Compaq  is  currently  searching  for  a  new  chief  executive  officer and the
operational  role  of  a  chief  executive  officer  is  being  filled  by three
non-employee directors serving in a newly created Office of the Chief Executive.
While  the  Office  of the Chief Executive is moving quickly to make operational
decisions, the absence of a chief executive officer, particularly in combination
with  the  business  issues  now  confronting  Compaq,  could  lead to delays in
strategic  decision-making  as  well  as  employee  retention  issues that could
complicate  the  timely  implementation  of  operational  decisions.

     Quarterly  sales  cycle  makes  planning  and  operational  efficiencies
difficult.  Compaq, like other computer companies, generally sells more products
in  the  third  month of each quarter than in the first and second months.  This
sales  pattern  places  pressure on manufacturing and logistics systems based on
internal  forecasts  and  may  adversely  affect Compaq's ability to predict its
financial  results  accurately.  In  addition,  to  rationalize  manufacturing
utilization,  Compaq  may build products early in the quarter in anticipation of
demand  late  in  the  quarter.  Developments  late  in  a  quarter,  such  as
lower-than-anticipated  product  demand, a systems failure, or component pricing
movements,  can  adversely  impact  inventory  levels,  cash,  and  related
profitability,  which  is  disproportionate to the number of days in the quarter
that  are  affected.

     Government focus on supplier activities could reduce competitive advantage.
Participants  in  the  computer  industry  generally  rely  on  the creation and
implementation of technology standards to win the broadest market acceptance for
their  products.  Compaq  must  successfully  manage  and  participate  in  the
development  of  standards  while  continuing  to differentiate its products and
services  in  a manner valued by customers.  When intellectual property owned by
competitors  or  suppliers becomes accepted as an industry standard, Compaq must
obtain  a license, purchase components utilizing such technology from the owners
of  such  technology or their licensees, or otherwise acquire rights to use such
technology,  which  could result in increased costs. Compaq believes that it has

                                       17
<PAGE>
been  successful  in  obtaining  competitive  pricing  in  these efforts and has
entered  into  license  agreements  with  key  industry  participants, including
Microsoft and Texas Instruments.  Recently the U.S. government has increased its
efforts to ensure that the holders of intellectual property do not utilize their
rights  in a manner that violates antitrust laws. There can be no assurance that
action  by  the federal government will not impede Compaq's ability to negotiate
terms  that  give  it  a competitive market advantage in component purchases and
under  the  license agreements that are necessary to operate its business in the
future.

     New  distribution  model  in  U.S. increases credit risks. Compaq's primary
means of distribution is through third-party distributors and resellers.  Compaq
continually monitors and manages the credit it extends to resellers and attempts
to  limit  credit  risks  by  utilizing risk transfer arrangements and obtaining
security  interests.  Recently  resellers have been consolidating in response to
changes  in  the  profitability of their businesses.  Compaq's business could be
adversely  affected  in  the  event  that the financial condition of third-party
computer  resellers  erodes.  Upon  the  financial  failure of a major reseller,
Compaq could experience disruptions in distribution as well as a loss associated
with the unsecured portion of any outstanding accounts receivable.  In May 1999,
Compaq  began  to  improve  its execution and simplify its business processes by
implementing  a  plan  to  reduce  the  number  of  its U.S. distributors.  This
reduction  concentrates  the  credit  and  business  risks.

     Doing  business  in  certain locations creates additional risks. Geographic
expansion,  particularly  manufacturing operations in developing countries, such
as Brazil and China, and the expansion of sales into economically volatile areas
such  as  Asia Pacific, Latin America and other emerging markets, subject Compaq
to  a  number  of  economic and other risks, such as financial instability among
resellers  in  these  regions.  Compaq generally has experienced longer accounts
receivable  cycles  in  emerging  markets,  in particular Asia Pacific and Latin
America,  when compared to U.S. and European markets.  Geographic expansion also
subjects Compaq to any political and financial instability in the countries into
which it expands, including currency devaluation and interest rate fluctuations.
Compaq  continues  to monitor its business operations in these regions and takes
various  measures  to  limit  risks  in  these  areas.

     Year  2000 compliance requires significant effort. The following disclosure
is  a Year 2000 readiness disclosure statement under the Year 2000 Readiness and
Disclosure  Act.

     Compaq's  Year  2000  program  is  designed  to minimize the possibility of
serious  Year  2000  interruptions.  Possible  Year  2000  worst  case scenarios
include  the  interruption of significant parts of Compaq's business as a result
of  critical  information  systems  failure  or  the  failure  of  suppliers,
distributors  or  customers.  Any  such interruption may have a material adverse
impact  on future results.  Since their possibility cannot be eliminated, Compaq
is  incorporating Year 2000 concerns into its contingency plans for dealing with
catastrophic  events.  In  addition,  Compaq  is  monitoring the need to develop
contingency  plans  to remediate information systems scheduled to be replaced by
systems  renewal efforts in case delays in the installation schedule for the new
systems  make  remediation  of  the  older  systems  necessary.

     In  1997,  Compaq established a task force to address its personal computer
product and customer concerns, and a separate task force to address its internal
information systems, including technology infrastructure and embedded technology
systems,  and the compliance of its suppliers and distributors.  In 1998, Compaq
integrated  the Tandem and Digital task forces with those of its own so that the
task  force  now  addresses the product and information systems and supplier and
distributor  concerns  for  the  entire  company.

     With  respect  to  product readiness, the compliance definitions of Compaq,
Tandem  and  Digital  remain  in  effect  for  most  of the respective follow-on
products  of  each  company.  The readiness status of Compaq, Tandem and Digital
products  is  available  on  the  Compaq  Year  2000  Web  site  at
www.compaq.com/year2000.  In  addition  to  selling tested products, Compaq also
-----------------------
offers  a  range  of  Year 2000 readiness services.  Because there is no uniform
definition  of Year 2000 "compliance" and because all customer situations cannot
be anticipated, particularly those involving other vendors' products, Compaq may

                                       18
<PAGE>
see  a  change in demand or an increase in warranty and other claims as a result
of  the  Year  2000  transition.  Such  events,  should they occur, could have a
material  adverse  impact  on  future  results.

     In  1998,  substantially  all  internal  information  systems  and  other
infrastructure  areas including communication systems, building security systems
and  embedded  technologies  in  areas  such  as  manufacturing  processes  were
identified,  assessed,  and categorized for Year 2000 readiness as Priority 1, 2
and 3, with 1 being critical, 2 being intermediate and 3 being non-critical with
no  impact  on  business  operations.  Compaq  is  on  schedule for meeting full
compliance  and  expects  to  be  substantially complete with its remediation of
Priority  1  and  Priority  2  items  (with  some  approved  exceptions for both
priorities) by June 30, 1999.  Compaq expects to be Year 2000 ready worldwide by
September  30,  1999.  Through  the  first quarter of 1999, Compaq continued its
program,  remediating  approximately  70%  of  the  total  Priority  1  items.

     Compaq  is  conducting  a  review  of  its  internal  production equipment,
procurement  suppliers,  and key channel partners regarding Year 2000 readiness.
Substantially  all internal production equipment has been tested and upgraded to
achieve  a  Year  2000 readiness state.  Substantially all production suppliers,
including strategic OEM's, have been reviewed and risk assessments have now been
completed.  Reviews  of  general  procurement suppliers will be complete by June
30,  1999.  Substantially  all  suppliers  are expected to be Year 2000 ready by
June  30,  1999.  Compaq  will  develop supplier contingency plans in the second
quarter  of 1999 where it believes significant risk exists.  Implementation will
occur  in  the  third quarter of 1999.  Reviews of key channel partners are also
expected  to  be  complete  by  June  30,  1999.

     Compaq  is  also carrying out major planned enterprise-wide internal system
renewal  efforts.  These planned major enterprise-wide system renewals have been
incorporated  into  the  Year 2000 readiness effort. Installations are scheduled
through  the  end  of  1999.  Based  on  Compaq's ongoing evaluation of internal
information  and  other  systems,  and system renewal roll-out schedules, Compaq
does not anticipate significant business interruption.  However, should business
interruption  occur, there could be a material adverse impact on future results.
With  respect  to suppliers and distributors, because Compaq's readiness depends
upon  their  cooperation  in  identifying,  disclosing and remediating problems,
failures  on  the  part  of  suppliers and distributors remain a possibility and
could  have  a  material  adverse  impact  on  future  results.

     The  costs  of  the  readiness  program for products are primarily costs of
existing  internal  resources  largely  absorbed  within  existing  engineering
spending  levels.  These costs were incurred primarily in 1997 and earlier years
and were not broken out from other product engineering costs. No future material
product readiness costs are anticipated.  The costs of the readiness program for
internal  information  and  other  systems  and suppliers and distributors are a
combination  of  incremental  external  spending  and  use  of existing internal
resources  and expertise.  Over the life of the internal readiness effort, these
costs  are  estimated  to  be  $120 million, of which approximately 60% has been
incurred  through  March  1999. The costs of implementing enterprise-wide system
renewal  efforts  are  not  included  in  this  estimate.  Milestones  and
implementation  dates  and the costs of Compaq's Year 2000 readiness program are
subject  to  change based on new circumstances that may arise or new information
becoming  available  that  may  change  underlying  assumptions or requirements.

     Euro  conversion  implemented.  Effective  January  1,  1999,  11 of the 15
member  countries  of  the European Union adopted the euro as their common legal
currency.  Compaq  achieved  euro  product  readiness  and  enabled its internal
information  systems to conduct electronic transactions in the euro in the first
quarter  of  1999.  We  do  not  believe  the  costs of euro compliance will  be
material.

     Tax rate depends upon manufacturing in Singapore.  Compaq anticipates a 34%
effective  tax  rate  for 1999, with the increase from 1998 due partially to the
impact  of  non-deductible  goodwill amortization generated by acquisitions that
closed  in  mid-February  and April 1999.  Compaq benefits from a tax holiday in
Singapore  that  expires  in  2001, with a potential extension to August 2004 if
cumulative  investment levels and other conditions are maintained.  Compaq's tax
rate  is  heavily dependent upon the proportion of earnings that is derived from

                                       19
<PAGE>
its  Singaporean  manufacturing  subsidiary  and  its  ability to reinvest those
earnings  permanently  outside the U.S.  If the earnings of this subsidiary as a
percentage  of Compaq's total were to decline significantly from current levels,
or  should  Compaq's  ability  to  reinvest  those earnings be reduced, Compaq's
effective  tax  rate  would increase.  In addition, should Compaq's intercompany
transfer  pricing  with  respect  to  its  Singaporean  manufacturing subsidiary
require  significant  adjustment  due  to audits or regulatory changes, Compaq's
overall  tax  rate  could  increase.

     Currency  Fluctuations.  Compaq's  risks  associated  with  currency
fluctuations  are  discussed  in  Item  3  below.

     Because  of  the  foregoing  factors,  as well as other variables affecting
Compaq's  operating results, past financial performance should not be considered
a  reliable  indicator  of  future  performance,  and  investors  should not use
historical  trends  to  anticipate  results  or  trends  in  future  periods.

ITEM  3.  MARKET  RISKS

     Compaq  is  exposed  to  market  risks,  which  include changes in U.S. and
international  interest  rates  as well as changes in currency exchange rates as
measured  against  the  U.S.  dollar and each other. It attempts to reduce these
risks  by  utilizing  financial  instruments, including derivative transactions.

     Compaq  uses  market  valuations  and  value-at-risk  valuation  methods to
preliminarily  assess  market  risk  of its financial instruments and derivative
portfolios.  It  uses  software by RiskMetrics  to estimate the value-at-risk of
its  financial  instruments  and  derivative  portfolios  based  on estimates of
volatility  and  correlation of market factors drawn from RiskMetrics  data sets
for the dates calculated.  RiskMetrics  defines loss as a reduction in the value
of  a portfolio in the event of adverse market conditions, using a predetermined
confidence interval, over a specified period of time.  Compaq included all fixed
income  investments  and  foreign  exchange  contracts  in  the  value-at-risk
calculation.  The  holding  period for these instruments varies from two days to
nine  months.  The  measured  value-at-risk  from  holding  derivative and other
financial  instruments,  using a 95% confidence level and assuming normal market
conditions  during  the  period  ended  March  31,  1999  was  immaterial.

     The  value  of the U.S. dollar affects Compaq's financial results.  Changes
in  exchange  rates  may  positively  or  negatively affect Compaq's revenues as
expressed  in  U.S.  dollars,  gross  margins,  operating expenses, and retained
earnings.  Compaq  engages  in  hedging  programs  aimed at limiting in part the
impact  of  currency  fluctuations.  Using primarily forward exchange contracts,
Compaq  hedges  those  assets and liabilities that, when remeasured according to
generally accepted accounting principles, impact the income statement.  For some
markets,  Compaq  has  determined  that  ongoing  hedging of non-U.S. dollar net
monetary  assets is not cost effective and instead attempts to minimize currency
exposure  risk  through  working  capital management.  There can be no assurance
that such an approach will be successful, especially if a significant and sudden
decline  occurs  in  the  value  of local currencies.  From time to time, Compaq
purchases  foreign  currency  option  contracts  as  well  as short-term forward
exchange  contracts  to  protect against currency exchange risks associated with
the  anticipated revenues of Compaq's international marketing subsidiaries, with
the  exception  of Latin America and other subsidiaries that reside in countries
in which such activity would not be cost effective or local regulations preclude
this type of activity.  These hedging activities provide only limited protection
against  currency exchange risks. Factors that could impact the effectiveness of
Compaq's hedging programs include accuracy of sales forecasts, volatility of the
currency  markets,  and  availability  of  hedging  instruments.  All  currency
contracts that are entered into by Compaq are components of hedging programs and
are  entered  into  for  the  sole purpose of hedging an existing or anticipated
currency  exposure,  not  for  speculation.  Although  Compaq  maintains  these
programs  to  reduce  the impact of changes in currency exchange rates, when the

                                       20
<PAGE>
U.S. dollar sustains a strengthening position against currencies in which Compaq
sells  products  and services or a weakening exchange rate against currencies in
which  Compaq  incurs  costs, Compaq's revenues or costs are adversely affected.

                                       21
<PAGE>
                           PART II.  OTHER INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS

General  Litigation
-------------------

     Compaq  is  subject  to  legal  proceedings  and  claims  that arise in the
ordinary  course  of  business.  Management does not believe that the outcome of
any  of  those  matters  will  have  a  material  adverse  effect  on  Compaq's
consolidated  financial  position,  operating  results  or  cash  flows.

Class  Action  Litigation
-------------------------

     Compaq  is  subject  to  a number of shareholder class action claims.  Five
purported class action lawsuits of all persons who purchased Compaq common stock
from  July  10, 1997 through March 6, 1998, have been consolidated in the United
States District Court for the Southern District of Texas, Houston Division.  The
named  defendants  for  these actions include Compaq and some of its current and
former  officers  and  directors.  The  complaints  allege  that  the defendants
violated  federal  securities  laws  by  withholding  information  and  making
misleading  statements  about  channel inventory and factoring of receivables in
order  to inflate the market price of Compaq's common stock, and further alleges
that  a  number  of  individual  defendants  sold  Compaq  common stock at these
inflated prices.  Lead counsel for the plaintiff has been appointed.  Plaintiffs
filed  a  consolidated  amended  complaint  on  March  16,  1999.

     A  number  of  purported  class  actions were filed in March and April 1999
against  Compaq in the United States District Court for the Southern District of
Texas,  Houston Division.  These actions name Compaq and a number of its current
and former executive officers as defendants and are purported to be on behalf of
persons  who  purchased  Compaq stock from January 27, 1999 through February 25,
1999, or from January 27, 1999 through April 9, 1999.  The actions assert claims
under  federal  securities laws.  The complaints allege that defendants inflated
the  price  of  Compaq  stock  by  making  false and misleading statements about
Compaq's  sales  and  further  allege that a number of current and former Compaq
officers  sold  Compaq  stock  at  these inflated prices.  The plaintiffs in the
above  actions  seek  monetary  damages,  interest,  costs  and  expenses.

     Several  purported  class action lawsuits were filed against Digital during
1994  alleging  violations  of  federal  securities  laws  arising  from alleged
misrepresentations  and  omissions in connection with Digital's sale of Series A
8-7/8%  Cumulative  Preferred  Stock  and  Digital's  financial  results for the
quarter  ended  April 2, 1994.  During 1995, the lawsuits were consolidated into
three  cases, which were pending before the United States District Court for the
district  of  Massachusetts.  On August 8, 1995, the Massachusetts federal court
granted the defendants' motion to dismiss all three cases in their entirety.  On
May  7,  1996, the United States Court of Appeals for the First Circuit affirmed
in part and reversed in part the dismissal of two of the cases, and remanded for
further  proceedings.  The  parties  are  proceeding  with  discovery.

     Compaq  believes  these suits are without merit and intends to defend these
suits  vigorously.


ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     There  were  no  matters submitted to a vote of security holders during the
first  quarter of 1999. At the annual meeting of stockholders of Compaq on April
22,  1999,  the stockholders voted on two proposals. The first was a proposal to
elect  Benjamin  M.  Rosen,  Lawrence T. Babbio, Jr., Judith L. Craven, Frank P.
Doyle,  Robert  Ted Enloe, III, George H. Heilmeier, Peter N. Larson, Kenneth L.
Lay,  Thomas  J.  Perkins,  Kenneth Roman and Lucille S. Salhany as directors of
Compaq.  The  following  table  sets  forth  the  votes  in  such  election:

                                       22
<PAGE>
<TABLE>
<CAPTION>
Director                   Votes For    Votes Against or Withheld
-----------------------  -------------  -------------------------
<S>                      <C>            <C>
Benjamin M. Rosen . . .  1,432,191,244                 12,103,130

Lawrence T. Babbio, Jr.  1,432,653,750                 11,640,624

Judith L. Craven. . . .  1,431,148,436                 13,145,938

Frank P. Doyle. . . . .  1,432,108,981                 12,185,393

Robert Ted Enloe, III .  1,432,284,036                 12,010,338

George H. Heilmeier . .  1,432,534,382                 11,759,992

Peter N. Larson . . . .  1,432,529,838                 11,764,536

Kenneth L. Lay. . . . .  1,432,431,330                 11,863,044

Thomas J. Perkins . . .  1,432,301,567                 11,992,807

Kenneth Roman . . . . .  1,432,182,559                 12,111,815

Lucille S. Salhany. . .  1,432,411,416                 11,882,958
</TABLE>

     The  shareholders  also  voted on a proposal to approve the Compaq Employee
Stock  Purchase Plan. The following table sets forth the votes in such election:

<TABLE>
<CAPTION>
<S>                   <C>
Number of Shares:. .  1,444,294,374

    Voted For. . . .  1,372,605,527

    Withheld . . . .     66,209,770

    Abstentions. . .      5,477,677

    Broker Non-Votes          1,400
</TABLE>

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     Exhibit  No.     Description

        3.2              Bylaws

        27               EDGAR  financial  data  schedule

        10.21            Employee  Stock  Purchase  Plan

(b)     Reports  on  Form  8-K

   (i)    Report on Form 8-K dated  January 11, 1999,  containing  Compaq's news
          release  dated  January 11,  1999,  announcing  Compaq's  agreement to
          acquire Shopping.com, an on-line retailer
   (ii)   Report on Form 8-K dated  January 21, 1999,  containing  Compaq's news
          release  dated  January 21, 1999,  announcing an amendment of Compaq's
          offer price for shares of Shopping.com
   (iii)  Report on Form 8-K dated  January 26, 1999,  containing  Compaq's news
          release dated January 26, 1999,  announcing  the creation of AltaVista
          Company
   (iv)   Report on Form 8-K dated  January 27, 1999,  containing  Compaq's news
          release dated January 27, 1999,  with respect to its earnings  release
          for the fourth quarter of 1998
   (v)    Report on Form 8-K dated February 16, 1999,  containing  Compaq's news
          release  dated  February 16, 1999,  announcing  Compaq's  agreement to
          acquire Zip2 Corporation,  a provider of Internet  platform  solutions
          for media  companies and local  e-commerce  merchants  and  containing
          Compaq's  news  release  dated  February  16,  1999,  announcing  that
          approximately  95.91 percent of the outstanding shares of common stock
          of Shopping.com had been tendered in response to Compaq's tender offer
          that closed on February 12, 1999
   (vi)   Report on Form 8-K  dated  March 9,  1999,  containing  Compaq's  news
          release  dated  March  9,  1999,   announcing   the   acquisition   of
          Shopping.com
   (vii)  Report  on  Form 8-K  dated  April  5, 1999, containing Compaq's  news
          release  dated  April  5,  1999,  announcing  the  completion  of  the
          acquisition of Zip2 Corporation

                                       23
<PAGE>
   (viii) Report  on  Form  8-K  dated  April  9, 1999, containing Compaq's news
          release dated April 9, 1999, announcing that based upon a $9.4 billion
          revenue  estimate and a less than favorable sales mix, Compaq expected
          to report a profit of  approximately  $.15  per  share for the quarter
          ended  March  31,  1999
   (ix)   Report  on  Form  8-K  dated  April 18, 1999, containing Compaq's news
          release  dated  April  18,  1999, announcing the resignations of Chief
          Executive Officer,  Eckhard  Pfeiffer  and  Chief  Financial  Officer,
          Earl  Mason  and the formation  of an Office of the Chief Executive to
          oversee the day-to-day running of  Compaq's  operations
   (x)    Report  on  Form  8-K  dated  April 21, 1999, containing Compaq's news
          release dated April 21, 1999, with respect to its earnings release for
          first  quarter  1999
   (xi)   Report  on  Form  8-K  dated  May  11,  1999, containing Compaq's news
          release  dated May 11, 1999 announcing the resignation of an executive
          officer

All  other  items  specified  by  Part  II  of  this report are inapplicable and
accordingly  have  been  omitted.

                                       24
<PAGE>
                                   SIGNATURES

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.


May  14,  1999                COMPAQ  COMPUTER  CORPORATION


                              /s/  Ben  K.  Wells
                              ---------------------------------------------
                              Ben K. Wells, Acting Chief Financial Officer
                              and  Vice  President,  Corporate Treasurer
                              (as authorized officer and as acting principal
                              financial  officer)

<PAGE>