HP Takes Top PC Spot from Dell, Analysts Say

IDC and Gartner both say Dell's weak performance in the United States contributed to HP regaining the No. 1 ranking for the first time since 2003.

Hewlett-Packard overtook Dell as the worlds top PC vendor in the third quarter, according to research firms IDC and Gartner.

This is the first time that HP has been in the No. 1 spot since Dell overtook it in the fourth quarter of 2003, according to both surveys, though both said the margin between the two vendors was slim. The firms released their numbers Oct. 18.

"HP continues to take better advantage of the faster growth segments such as the consumer market. The companys share trajectory reflects its improvements in operational execution and changes in marketing," Gartner analyst Mikako Kitagawa said in a prepared statement.

"Dell felt the effects of the weak sales in the U.S. market, and it gave up some ground."

Dell has been dogged in 2006 by a federal investigation into its finances and a recall of 4.1 million Sony batteries from its laptops. Problems with customers support also have gotten wide attention.

Battery recalls hit a number of vendors, including number three system maker Lenovo Group, but Loren Loverde, director of IDCs Worldwide Quarterly PC Tracker, said there should be few long-term effects on Dell and the industry as a whole.

/zimages/6/28571.gifRead more here about the battery recalls.

"Dell has had some negative publicity recently regarding its battery recall, but it is hard to attribute the third-quarter results to bad publicity alone," Loverde said in a statement.

"Dell will likely be very aggressive in the fourth quarter, and we will see how similar battery recalls affect other vendors. These factors may cut into fourth-quarter growth, but overall we dont see a broad threat to fourth quarter growth."

Worldwide, IDC, of Framingham, Mass., said HP and Dell both held a 17.2 percent market share in shipments, though HP had shipped about 28,000 more units than Dell, of Round Rock, Texas.

Stamford, Conn.-based Gartner, said HP held a 16.3 percent market share advantage, with Dell at 16.1 percent. Both analyst firms had Lenovo, Acer and Toshiba rounding out the top five slots.

In the United States, where the market was considered weak in the third quarter, Dell was still the top PC vendor, according to both surveys, with HP, of Palo Alto, Calif., coming in second. Gateway, Apple and Toshiba also were in the top five.

Overall, shipments worldwide grew 6.7 percent and 7.9 percent, according to Gartner and IDC, respectively. The United States saw declines of between 0.7 percent and 2 percent.

Two key factors contributing to slower sales in the United States were a continued weakness in the professional desktop space and a carry-over effect from a strong second quarter, Gartner analyst Mikako Kitagawa said.

IDC analyst Bob ODonnell agreed, saying that there continues to be strong transition in the United States from desktops to notebooks.

In addition, Dells troubles—it shipped about 400,000 fewer systems in the United States in the third quarter over the same period last year, according to both IDC and Gartner—had a particularly strong impact on the U.S. market, ODonnell said.

While Dell saw U.S. shipments drop, HPs rose 6.3 percent to 6.9 percent, the analyst firms said. Globally, HPs shipments grew more than 15 percent, while Dells grew 3.6 percent, they said.

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