HP tops Dell as PC sales continue to slow

For the second time in a row, HP beat Dell for the title of world's largest PC vendor, even though the global market fell short of predicted growth, IDC said

HP edged out Dell again for the title of world's largest PC vendor, even though the global market fell short of predictions, according to an analysis of fourth quarter PC shipments released by IDC.

Slow sales in the US, Japan and the Europe, Middle East and Africa (EMEA) region pushed worldwide PC shipments to grow only 8.7 per cent to 65.6 million units in the fourth quarter, missing a forecast of 10.1 per cent growth.

According to Gartner estimates, released at the same time, PC shipments grew at 7.4 per cent during the quarter. Gartner counted a total of 67.3 million units shipped.

After enjoying 16 per cent growth in 2005, vendors were disappointed to see the market rise just 10 per cent to 228.6 million for the full year of 2006. That number also fell short of IDC's forecast of 10.4 per cent growth. Gartner did not release full-year 2006 numbers.

This is a volatile period for the PC market, with changes driven by Microsoft's recent release of the Windows Vista OS for commercial users, its pending release for consumers, and an ongoing transition in demand from desktops to notebooks, director of IDC's Worldwide Quarterly PC Tracker, Loren Loverde, said.

"HP clearly was able to capitalize on the situation, solidifying its lead in worldwide quarterly shipments with a 3.4 per cent share advantage over Dell, but it also reflects underlying pricing and segment trends that were tough on competitors such as Dell, Lenovo, Gateway and Fujitsu-Siemens," he said.

In contrast, companies including HP, Acer, Toshiba and Apple gained market share by using aggressive pricing to boost retail and consumer sales, particularly in the notebook segment, he said. That strategy appeared to overcome many vendors' fears that Microsoft's delays in launching Vista would push buyers to delay PC purchases.

"It does not appear that the January release of Vista's consumer version had a big impact on fourth quarter shipments, but it remains to be seen if the consumer drivers will remain strong in the first half of 2007," Loverde said.

For the fourth quarter, IDC estimated that the top five PC vendors by worldwide market share were HP (18.1 per cent), Dell (14.7 per cent), Lenovo Group (7.3 per cent), Acer (7.1 per cent) and Toshiba (3.7 per cent).

Gartner pegged HP as the top PC vendor for the quarter, with 17.4 per cent market share, ahead of Dell at 13.9 per cent.

For the entire year of 2006, Dell was able to hold onto its number-one spot, but barely. Ranked by market share, the top vendors were Dell (17.1 per cent), HP (17.0 per cent), Lenovo (7.3 per cent), Acer (5.9 per cent) and Toshiba (4.0 per cent). IDC's market numbers include sales of desktop, notebook, ultraportable PCs and x86 servers, but not handhelds.

- Robert McMillan in San Francisco contributed to this story.

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