HP wrestles top spot from Dell

[Steven]

HP wrestles top spot from Dell

By Michael Kanellos and John G. Spooner

Staff Writer, CNET News.com

January 16, 2003, 4:49 PM PT

Hewlett-Packard regained its position as the world's largest PC maker in the fourth quarter, while the industry overall saw shipments increase in the quarter and in 2002 as a whole.

PC shipments increased by 4 percent worldwide in the fourth quarter compared with the same period last year while shipments for the entire year were up 1.5 percent from the year before, according to research firm IDC.

In the United States, computer shipments were up 6.6 percent for the fourth quarter and 3.9 percent for the year, primarily because of consumer buying. Overall, 136 million desktops, notebooks and servers containing Intel or AMD chips left factory gates worldwide in 2002.

IDC rival Gartner said worldwide PC shipments grew by 2.7 percent in 2002, with U.S. shipments growing by 4.4 percent for the year.

Although the gains were modest, the increase in shipments represents a reversal from 2001, when the market shrank year over year for the first time in more than a decade and a half.

"It was a pretty solid quarter compared to our expectations, especially in the U.S. We're looking at it as a surprise on the upside," said Loren Loverde, an analyst with IDC.

HP back on top

Hewlett-Packard, meanwhile, took back the unit shipment lead from Dell Computer by shipping 120,000 more computers than Dell in the fourth quarter. HP's surge largely came as the result of strong consumer sales and aggressive price cutting, said Jim McDonnell, vice president of marketing in the personal systems group at HP. The fourth quarter is traditionally a more consumer-oriented quarter.

In the second quarter, HP became the largest PC maker for the first time, through its merger with Compaq Computer. Dell then snatched the lead from HP in the third quarter by a hair.

Still, the HP-Dell battle for dominance will go on as HP continues to shrink and Dell continues to grow. In the fourth quarter, HP saw its worldwide shipments contract by 9.8 percent and its market share decline from 18.5 percent to 16.1 percent. Meanwhile, Dell's market shipments rose 24.2 percent and its market share increased from 13.2 percent to 15.7 percent.

In the United States, Dell remained No. 1 in the fourth quarter with 29.2 percent of the market share, because of a 24 percent growth in shipments. HP's U.S. shipments shrank by 6.1 percent, leaving it with a 20.8 percent share in the states.

HP's McDonnell, however, noted that HP's shipments have risen sequentially for the past two quarters. Fourth-quarter shipments, in fact, grew by 21 percent worldwide over third-quarter shipments, according to IDC's figures. Dell's shipments grew only by 16 percent while the market as a whole saw shipments grow sequentially less.

"Dell has a lot of momentum. It grew at rates above 24 percent, year over year," Loverde added. "HP is doing well relative to its merger issues, and it also means that we could have a pretty close race, here for a number of quarters."

By the second quarter, HP will once again see its PC shipment grow, McDonnell added.

The two companies will also likely continue to try to undercut each other in price, in both the consumer and business markets. Recent reports show that many of HP's business desktops, for example, are priced within a few dollars of similar Dell systems.

The also-rans

Other manufacturers received mixed report cards when it came to growth. Gateway increased shipments in the fourth quarter but saw its market share decline slightly in the United States. For the year, Gateway's U.S. shipments declined by 15.4 percent, more than those of any other large manufacturer, leaving it with a 5.7 percent market share for the year.

IBM, the world's third-largest PC maker worldwide and the fourth largest in the United States, saw market share gains in the fourth quarter globally and in the states. However, on an annual basis, IBM lost ground slightly. Apple Computer, the fifth-largest manufacturer in the United States, saw its U.S. market share rise from 2.9 percent to 3 percent in the fourth quarter.

Despite the rebound in shipments, the consumer-driven nature of the fourth quarter, combined with economic uncertainty, may not portend a full-fledged turnaround. Larger-than-expected shipments in the fourth quarter of 2001 and the first quarter of 2002 buoyed forecasts, but then only lead to inventory gluts in subsequent quarters.

"We were not expecting a lot out of the fourth quarter, and we got more than we expected," Loverde said.

"The home PC market improved from a very difficult year in 2002," Charles Smulders, an analyst at Gartner, said in a statement. "The professional market showed no sign of a recovery during the year. Faced with a high degree of uncertainty, corporations more frequently chose to extend the life of a PC rather than upgrade."

Corporate PC buying, a mainstay of the industry, remains in deep-freeze, though some have said that a slight thaw could begin toward the second half. There hasn't been a large corporate buying binge since early 1999, and those machines are aging. Microsoft will also stop issuing bug patches for Windows 2000 and Windows 98, a factor that may nudge some to buy Windows XP machines, some analysts and executives have speculated.

Elsewhere in the world, demand in Europe and Japan remained anemic. Asia-Pacific shipments continued to grow faster than anywhere else, but the growth rate is flattening slightly.

China "is the fastest growing area in the (Asia-Pacific) region, and it did maintain mid-to-high single-digit growth this quarter, but that growth didn't accelerate a lot from last quarter," Loverde said. "That might mean that it will keep growing, but not accelerate as fast as some people had hoped."

http://news.com.com/2100-1040-981068.html?tag=fd_top

[ThunderRiver]

I personally think HP/Compaq is making better machines than Dell. I used to think the other way around, but after I bought my Dell Inspiron 8100. The experience sucked all the way. I had to endure 6 mo of BSOD when I first got it because of the crappy nVidia Geforce 2 Go driver. and then, I had to replace the unreliable IBM TravelStar twice in a roll because HD died. There is more! I had to send my machine back to repair twice because they told me "the connection between the LCD and the base system is lossen up"..what gee.. took them so long to find out? plastic casing sucks! And oh, my CDR-DVD combo died too, and I had to get that replaced.. all happened within 1 year of warranty. I love Dell..to the point where it gives me tons of troubles.

I am now using Compaq Evo n610c, very nice built with power and light weight. Compaq Presario is bad egg, but Evo series has proven it is sucess in business world ;)

-ThunderRiver

[tkyoshi]

Compaq did have some production problems a few years back which gave it a bad name but it's nothing big, every manufacturer has glitches once in a while.

I also agree that the quality is much better. Also Compaq's are easy to fix/upgrade unlike Dells which have limited upgrading, especially if you have Integrated Graphics. Compaq's have an AGP slot for upgrade.

All of their models now look really good and they are very reliable too, if you do run into a problem service/warranty is excellent. I was having trouble with my DVD-ROM, it didn't read movies properly so they sent a box to my house the next day which then the computer got shipped overnight all the way to the east. Then fixed the next day then it was back at my house on the 3rd day (overnight ship back). I was extremely impressed.

I'm happy to see that they are back on top. HP's own computers have also improved since Compaq and HP merged.