PC market stops declining, for now

PC shipments worldwide grew by 3.8 percent in the third quarter compared with the same period a year ago, according to IDC, the first increase after five straight quarters of year-to-year declines. A small increase may occur in the fourth quarter as well, the market researcher added.

The latest quarter also marked the return of Dell Computer to the top of the PC pile. The company surpassed Hewlett-Packard, which became the top PC maker in worldwide shipments last quarter, owing to its acquisition of Compaq Computer.

The recent gain in PC shipments isn’t cause for too much celebration, however. PC shipments grew by only 6 percent from the second quarter--lower than the historical average of 9.2 percent. Growth from the third quarter to the fourth also is expected to be in the single digits and below historical levels. Intel and Apple Computer warned earlier this week that fourth-quarter sales could be flat to slightly higher.

Research company Gartner Dataquest said shipments in the third quarter rose 5.8 percent worldwide. However, if the disruption caused by the Sept. 11 terrorist attacks is factored into last year’s numbers, year-over-year sales were flat, the company said.

“The seasonal pattern (of shipment increases) is there, but it’s much more muted than usual,” said Roger Kay, an analyst at IDC.

Even if the industry growth spurt is short-lived, the third-quarter numbers continued to underscore Dell’s growing dominance in PCs. The Austin, Texas-based PC maker accounted for 16 percent of the desktops, notebooks and Intel- and AMD-based servers shipped during the quarter. Dell saw its worldwide shipments grow by 23 percent worldwide compared with the same period a year ago, according to IDC.

In contrast, HP’s shipments shrunk by 4.9 percent, leaving it with a 15.5 percent market share. The two companies combined shipped about 10 million PCs, but Dell shipped 200,000 more, said Kay.

Gartner Dataquest’s data showed Dell and HP neck and neck, separated by a tenth of a point with market shares of 15.8 percent and 15.7 percent, respectively. A tenth of a point represents about 30,000 units, Gartner Dataquest said.

In the United States, Dell continued to expand its already sizable margin. The company grew shipments by 29 percent to capture 29.4 percent of the US market, according to IDC. HP’s US shipments fell by 2 percent to give it a 19 percent market share. All told, the US market grew by 6 percent, slightly higher than the worldwide figure.

HP executives argued that the two companies’ third-quarter market shares are a tie and suggested it might be more accurate to look only at desktop and notebook shipments, eliminating servers from the picture, to declare the king of PCs. Servers, however, generally are more profitable than desktops or notebooks and long have been part of the quarterly tabulations.

HP recently has dropped prices on products such as notebooks to compete more aggressively with Dell. The move has analysts predicting a close race between the two giants in the future. —CNet News

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