Dell Gains in Flagging PC Market

The No. 1 computer maker's share grew over 9 percent from a year ago in a quarter where PC sales fell 12 to 14 percent, according to two new reports.

Fallout from terrorist attacks in the United States and a weakening global economy further undermined PC unit sales worldwide, resulting in about a 12 percent to 14 percent drop from a year ago, according to two new reports.

Yet, despite the difficult environment, Dell Computer Corp., of Round Rock, Texas once again gained market share, further cementing its position as the worlds top PC supplier, according to preliminary third-quarter data released Wednesday by Gartner Dataquest and International Data Corp.

Meanwhile, former No. 1 PC maker Compaq Computer Corp. and Hewlett-Packard Co., which announced plans last month to merge, both suffered significant declines in market share during the quarter.

According to Gartner, Dells share grew 10 percent from a year ago, giving it 13.8 percent of the world market, while Compaqs share fell 31 percent, for a total market share of 10.4 percent, making it the worlds second largest PC vendor. HPs share also slipped, dropping nearly 25 percent from a year ago, giving it only 6.4 percent of the world market.

According to IDC, Dells share grew 9.3 percent, Compaqs fell 31.8 percent and HPs declined 25.5 percent, giving the companies a 14.5 percent, 11 percent and 6.7 percent share of the world market, respectively.

Several issues combined to undermine Compaqs sales, according to Gartner analyst Charles Smulders.

"In addition to the Sept. 11 events [terrorist attacks in New York and Washington], we believe the company was adversely affected by an at first uncertain reaction to the HP/Compaq merger announcement," Smulders said in a statement issued with Gartners report.

Also, Houston-based Compaq and HP, of Palo Alto, Calif., were hurt by their reliance on U.S. consumer PC sales, which has been among the hardest hit segments of the market.

Looking ahead, Smulders said the lack of new applications arriving on the market to spur demand will likely result in weak sales for several quarters.

"Hardware performance has leapt ahead of most common software requirements, which provides the opportunity for users to extend their PC life cycles," Smulders said.

Worldwide sales, according to Gartner, totaled 30.7 million units, a decline of 11.6 percent from a year earlier. U.S. sales were particularly hard hit during the third quarter, dropping 18.7 percent from a year ago to about 11 million units.

IDC, which uses a different method to calculate PC sales, reported similar trends.

According to IDCs preliminary data, worldwide PC sales fell 13.7 percent to 29.1 million units. U.S. sales declined more dramatically, falling 21 percent from a year earlier to slightly more than 10.3 million.