HP tops Dell as PC sales continue to slow in Q4

Hewlett-Packard Co. edged out Dell Inc. again for the title of world's largest PC vendor, although the global market fell short of predictions, according to fourth-quarter reports released yesterday by two market research firms.

With slow sales in the U.S., Japan and the Europe, Middle East and Africa (EMEA) region, worldwide PC shipments grew only 8.7% to 65.6 million units in the fourth quarter, missing a forecast of 10.1% growth, according to Framingham, Mass.-based IDC. (IDG Corp. is the parent company of IDC and Computerworld.)

According to Gartner Inc. estimates, also released yesterday, PC shipments grew at 7.4% during the quarter. Gartner counted a total of 67.3 million units shipped.

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

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

"HP clearly was able to capitalize on the situation, solidifying its lead in worldwide quarterly shipments with a 3.4% 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%), Dell (14.7%), Lenovo Group Ltd. (7.3%), Acer Inc. (7.1%) and Toshiba Corp. (3.7%).

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

For the full year 2006, Dell was able to hold on to its No. 1 spot, but barely. Ranked by market share, the top vendors were Dell (17.1%), HP (17.0%), Lenovo (7.3%), Acer (5.9%) and Toshiba (4.0%). IDC's market numbers include sales of desktops, notebooks, ultraportable PCs and x86 servers, but not handhelds.

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